bloomberg). Holy cow. They had build up the reserves in the recent years as the price of oil hovered above $100 and now they want to sell it when oil costs less than halve!
According to Bloomberg the US government wants to raise cash. I guess they will by disappointed. It is highly unlikely that they will get their investment back. Nobody knows how much oil will cost in the years 2018 and beyond. But it is reasonable that the commoditywill be not much more expensive than today. The futures on the financial markets signal prices around $60 (cmegroup). I assume oil will even get cheaper. Beginning next year Iran will be allowed to export oil and expand the global supply thanks to the lifted sanctions.And the cost of the US oil production (fracking) are falling swiftly thanks to the rising productivity (driveby).
Buying oil when it is very expensive and selling it for half price or below doesn`t look like good business. China is taking advantage of the oil price drop and filling its oil reserves now. It seems that the communist government has more sense for economics than the leaders of the free world. Buying oil expensive and dumping it cheap is a big waste of tax payer money and a sign of economic illiteracy.