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The Obama administration plans to release 30 million barrels of crude from its emergency oil stockpile as part of an international effort to put more oil in the market.
The move comes as political pressure mounts on President Barack Obama to do something to arrest rising gasoline prices fed by unrest in Libya and throughout the Middle East. Western nations also have been frustrated by OPEC countries’ failure to raise production after a meeting earlier this month.
“We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery,” Energy Secretary Steven Chu said in a statement. “As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary.”
The release of oil from the United States’ Strategic Petroleum Reserve coincides with the release of 30 million barrels of oil from other members of the International Energy Agency over the next 30 days.
Including the United States’ 30-million barrel contribution, 28 IEA member countries pledged to release a total of 60 million barrels of oil in coming months, according to Executive Director Nobuo Tanaka.
“Today, for the third time in the history of the International Energy Agency, our member countries have decided to release stocks.” Tanaka said in a news release. “I expect this action will contribute to well-supplied markets and to ensuring a soft landing for the world economy.”
U.S. officials said the release would help offset a loss of roughly 1.5 million barrels of oil daily — mostly light sweet crude preferred by refiners — tied to the unrest in Libya as Americans enter the heavy summer driving season.
“We’re heading into a period in which demand for oil tends to be at its highest,” a senior administration official said during a conference call with reporters. “This release is intended to address an increase in demand, even as Saudi Arabia and (other) countries ramp up production over the remainder of the year.”
The news immediately sent prices down for West Texas Intermediate crude, the U.S. benchmark. WTI futures were trading at $90.36 — down $5.05 — in early morning trading.
The move comes as political pressure mounts on President Barack Obama to do something to arrest rising gasoline prices fed by unrest in Libya and throughout the Middle East. Western nations also have been frustrated by OPEC countries’ failure to raise production after a meeting earlier this month.
“We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery,” Energy Secretary Steven Chu said in a statement. “As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary.”
The release of oil from the United States’ Strategic Petroleum Reserve coincides with the release of 30 million barrels of oil from other members of the International Energy Agency over the next 30 days.
Including the United States’ 30-million barrel contribution, 28 IEA member countries pledged to release a total of 60 million barrels of oil in coming months, according to Executive Director Nobuo Tanaka.
“Today, for the third time in the history of the International Energy Agency, our member countries have decided to release stocks.” Tanaka said in a news release. “I expect this action will contribute to well-supplied markets and to ensuring a soft landing for the world economy.”
U.S. officials said the release would help offset a loss of roughly 1.5 million barrels of oil daily — mostly light sweet crude preferred by refiners — tied to the unrest in Libya as Americans enter the heavy summer driving season.
“We’re heading into a period in which demand for oil tends to be at its highest,” a senior administration official said during a conference call with reporters. “This release is intended to address an increase in demand, even as Saudi Arabia and (other) countries ramp up production over the remainder of the year.”
The news immediately sent prices down for West Texas Intermediate crude, the U.S. benchmark. WTI futures were trading at $90.36 — down $5.05 — in early morning trading.
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