Before focusing on oil, it is useful to place it in the context of overall US energy consumption.
These maps from The New York Times
show global oil production, consumption and supplies to
the US for 2007:
This chart shows the cyclical interaction of US oil prices and oil consumption through the OPEC years. We are completing a similar counter-clockwise spiral now.
The Federal Government created the Strategic Petroleum Reserve in 1977 to protect the US against future disruptions of oil imports. The SPR currently contains about 700 million barrels of oil, equivalent to about 60 days of US oil imports.
The economic efficiency of the SPR is questionable. The figure below shows annual net quantity changes in the SPR plotted against the logarithm of US oil prices/barrel. The red and blue time paths indicate Republican and Democratic presidential administrations.
Although the SPR is intended to stabilize US oil prices, its largest purchases were made during the Reagan administration when prices were high, and its largest sales were made when prices were relatively low, so it has probably de-stabilized US oil prices. The large sales from the SPR during two election years reflect a Clinton administration strategy to curry favor with voters by driving down oil prices.
