> TEOTWAWKI Blog: World Oil Reserves Tapped



World Oil Reserves Tapped

WSJ has good coverage of this story.

The U.S. and allies tapped strategic oil reserves and released an additional 60 million barrels of oil in an attempt to manipulate the world economy in fears of a slowing recovery. In response, oil prices dropped almost 5%.

Now 60 million barrels of oil is a blip in terms of things; it's less than one day of worldwide consumption. And this is only a temporary measure, so if all else remains equal, we should expect to see oil prices return to previous levels shortly.

One interesting thing is that both gold and silver spot prices responded by dropping below what had looked to be "plateau" levels for the past few weeks. If indeed this oil price drop is temporary, we would also expect this price drop to be temporary. Could be a good time to jump in and buy some PMs, if you're sitting on the sidelines waiting for good timing.