On Friday’s broadcast of CNBC’s “Squawk Box,” co-hosts Becky Quick and Joe Kernen reacted to news that the Biden administration wants to try to refill the Strategic Petroleum Reserve (SPR) at a price of $79 a barrel or less by noting that there was a time when the SPR could have been refilled at a lower price, but we didn’t and the reserve is low because it was drained “to help stem an inconvenient price rise for an administration.”
Kernen said, “[T]he Department of Energy says it wants to buy six million barrels of oil for the Strategic Petroleum Reserve. It’s hoping to get a price of $79 or less. The department is working to refill the Petroleum Reserve after President Biden ordered a historic release to try to stem high gas prices. Buy low, sell high. I’m not sure that’s what we’re doing here. There was a time.”
Quick responded, “Very briefly, yeah, where we could have filled it at lower rates.”
Kernen then said, “[I]t does get a little scary with — no one was expecting the Middle East to totally be a different place than what we saw or what we thought it was six months ago.”
Quick stated, “No. And if you looked at oil prices three weeks ago, we were talking about how energy prices had come down 10% in ten days, WTI. And that was something we were watching really closely. It was on concerns that there wasn’t going to be as much demand around the globe with a potential recession. … So, it turned very quickly.”
Kernen then asked, “If there was a real situation, how much do — we don’t have that much for the emergency — what it was designed for.”
Quick then cut in to say, “Yeah, but we also produce far more energy today.”
Kernen responded, “Right. But it was not designed to help stem an inconvenient price rise for an administration.” Quick responded, “No.”
Follow Ian Hanchett on Twitter @IanHanchett