TY  - UNPD
A1  - Kilian, Lutz
A1  - Zhou, Xiaoqing
T1  - Does drawing down the U.S. strategic petroleum reserve help stabilize oil prices?
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 647
N2  - We study the effects of releases from the U.S. Strategic Petroleum Reserve (SPR) within the context of fully specified models of the global oil market that explicitly allow for storage demand as well as unanticipated changes in the SPR. We show that historically SPR policy interventions, defined as sequences of exogenous SPR shocks during selected periods, have helped stabilize the price of oil. Their effect on the price of oil, however, has been modest. For example, the cumulative effect of the SPR releases after the invasion of Kuwait in 1990 was a reduction of $2/barrel in the real price of oil after 7 months. Whereas emergency drawdowns tend to lower the real price of oil, we find that exchanges tend to raise the real price of oil in the long run. We also provide a detailed analysis of the benefits of the 2018 White House proposal to sell off half of the SPR within the next decade. We show that the expected fiscal benefits of this plan are somewhat higher than the revenue of $16.6 billion dollars projected by the White House.
T3  - CFS working paper series - 647 
KW  - SPR
KW  - crude oil
KW  - oil inventories
KW  - storage
KW  - expectations
KW  - policy intervention
KW  - fiscal policy
Y1  - 2020
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/55827
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-558277
UR  - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3731017
IS  - January 28, 2019. This version: May 13, 2020
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -