The movers and shakers in the energy business use some acronym-driven market-moving shorthand that might seem like some sort of code. There’s the SPR, OPEC, COP26 and RBOB. It can seem like alphabet soup to the uninitiated.
Matt Smith is lead oil analyst for Kpler. He explained what it all means to the Texas Standard.
SPR – Strategic Petroleum Reserve: The U.S. Maintains a reserve of oil it can call on in case of an energy emergency, or as an economic safety valve. It currently contains 600 million barrels of oil, with a capacity of more than 700 million barrels. The U.S. Is currently considering a release of 20 million barrels from the reserve to fund the federal government and to modernize the SPR’s storage facility.
OPEC – Organization or Producing Exporting Countries: The group, made up primarily of Persian Gulf oil producers, but also includes several African countries. The group is currently unwinding production cuts it made during the pandemic. The U.S. Is pressuring OPEC to release more oil more quickly, to keep prices down. But OPEC has resisted these calls.
COP26 is the international climate conference being held in Glasgow, Scotland. It’s the second week of the event, which has features speeches by world leaders, and announcements of goals related to reducing emissions and taking other actions to stem the impact of climate change. China, Russia and India have not joined agreements to cut methane emissions. The U.S., Australia, India and China have not joined agreements to limit the use of coal.
RBOB –Reformulated Blendstock for Oxygenate Blending: The marketplace for gasoline futures is closely watched by energy pros as a harbinger of future consumer prices. Those prices are high right now, but could go lower if the SPR oil release goes ahead.