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No, you wouldn't have a manufactured shortage, because any one of the several entities with a strategic reserve could defect from the others and sell its product when the price increases. Not to mention that investment in production activity would sharply increase if spot price were to rally significantly. On a consumer level, it would just delay the inevitable price decline of oil, heating fuel, diesel, gasoline, resid, and jet fuel, and that delay would be harmful to alternative energy investment and electric car sales. Not to mention it would benefit China, a place where industrial activity has already been rebooted. The economy isn't down because oil prices are down. It's quite the opposite; the oil market is reflecting the economic reality. Prices were declining even prior to the OPEC+ meeting. If it were not for the market already softening, nobody would have been discussing additional production curbs at all. We had a mild winter, so heating fuel demand was low. Industrial production was interrupted, so that hurt demand for residual fuels that give energy to factories and power generation plants, as well as the ships that carry goods across oceans. Diesel was affected for the same reason. Jet fuel demand is down due to the complete standstill of the travel industry. Even bitumen and carbon black should see decreased demand because when people stop commuting and traveling, there is less need to resurface roads and replace tires. Plus, if you're not driving your car, you're not buying much gasoline. Those are massive, natural reasons why demand is down for gasoline, middle distillates, and heavy residues. You can't bring that demand back by simply pumping a few-hundred-million barrels of oil into the ground for storage. The way to induce a manufactured shortage would be by imposing import restrictions or tariffs. |