High Crude Prices Revives Talk of Emergency Oil Release
Talks about the possibility of releasing the emergency crude supplies of the United States are being revived by the Obama administration as the current crude price moves above $95 per barrel, according to an official of the administration.
The discussions are in the early stages and a final verdict seems far from happening, added the official. However, the increase in the current crude price, together with the rising gasoline prices today, is causing worries that high prices of fuel can destroy an already unstable economy.
The gasoline price today is averaging at $3.70 per gallon, a higher rate from last month’s $3.40 per gallon, said the Fuel Gauge report of the AAA. Meanwhile, the oil price per barrel recently ended at $95.60 to reach a new high for three months.
The Strategic Petroleum Reserve consists of an oil stockpile amounting to 700 million barrels to be utilized when there are disruptions in supply. The last time the Obama administration released crude reserves was in 2011 as part of a combined effort to compensate for reductions in oil output from war-torn Libya.
Moreover, the administration is talking to allied nations to discuss the possible details of a coordinated oil supply release, said the official.
In case the President pushes through with selling emergency crude, Republicans will most probably criticize the decision as they have previously made a stand that the use of the Strategic Petroleum Reserve should only occur in instances of serious disruptions in oil supply, not in response to politically challenging price increases.
Making that move will most likely heighten the debate on the Keystone XL, an oil pipeline with a length of 1,700 miles that has been blocked temporarily by the current administration.
Last spring, the White House considered the release of strategic reserves when the oil price per barrel was almost $110. The idea was set aside as soon as the price of oil dropped.