This is a "cut and paste" from AP News. After reading it, do you think this was a good or bad move? Do you believe it will reduce the price of gas for Americans?
Wary of a new surge in gas prices, the Obama administration has decided to release 30 million barrels of oil from the country's emergency reserve as part of a broader international response to lost oil supplies caused by turmoil in the Middle East and North Africa, particularly Libya.
The release from the U.S. Strategic Petroleum Reserve will be the largest ever, amounting to half of a 60 million-barrel international infusion of oil planned for the world market over the next month.
White House officials would not predict how the release of the oil will affect prices at the pump, although the move is intended to increase U.S. supplies during the peak summer driving season.
"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.
The move comes as retail gasoline prices dropped for the 20th consecutive day, down a penny from Wednesday, to $3.61 per gallon, according to AAA, Wright Express and Oil Price Information Service. That's about 21 cents lower than a month ago.
The timing brought criticism from business groups and Republican lawmakers, who accused President Barack Obama of playing politics with the country's oil reserves, which are intended to address emergencies.
"The Strategic Petroleum Reserve is an emergency lifeline to protect our nation against critical shortages in our oil supply and shouldn't be used as a Strategic Political Reserve to boost the popularity of elected officials," said Charles Drevna, president of the National Petrochemical & Refiners Association.
The administration's action will do little to benefit consumers while leaving the nation vulnerable to hurricanes or other natural disasters, or a foreign crisis that causes a real supply shortage, Drevna said.
Even some Democrats were puzzled by the move. "This decision would have been more timely if made when the disruption in Libyan oil supplies first occurred" early this year, said Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee. Still, Bingaman said he hopes the move helps deflate "speculative froth in the markets" and drives prices back to levels where most experts believe they should be.
The administration said the uprising in Libya has resulted in a loss of about 1.5 million barrels of oil a day. The release comes as the United States approaches a period of high energy use in July and August.
High oil prices and the resulting increase in the cost of gasoline have contributed to an economic slowdown and have put increased political pressure on Obama.
The government is wary of dipping into the petroleum reserve, releasing oil from it only in extreme cases, such as hurricanes, that affect oil supplies. The reserves - 727 million barrels stored in salt caverns along the Texas and Louisiana coasts - were created in response to the Arab oil embargo in the 1970s and last tapped in 2008 after hurricanes Gustav and Ike hit.
Oil prices dropped Thursday, the same day the International Energy Agency announced the plan to release a total of 60 million barrels of oil and a day after Federal Reserve Chairman Ben Bernanke warned that the U.S. economy was recovering more slowly than expected.
I don't like Obama, it will take a lot to get me to vote for his re-election. With that said, anything that can help with the economy today is a good thing. We now have unemployment records, both in percentile and duration, surpassing those of the great depression of the 1930's. Any little bit of help at this point I think is needed. If people are traveling, people are also working. That's my 2 cents.
I think this should be labeled as not Obama but the government, nothing in there says this was Obama's agenda, I wonder if this was planned a few months ago when it was quite high and rising and just took this long to complete now that is too late to do much good
I'm thinking this is not too smart a move but then that's just me. I'd be saving it for when the crap really hits the fan.
Until those holding back capitol for investing we need to reconstruct our job markets by using anything helpful. I think he hopes new construction generates jobs and it might do that. With $4 gas it's expensive and often prohibitive to commute far for work. This could help.
In my perfect world the Saudi's would tell us to GO FISH and we would seize their country.
Yummy & no more crazy Wahabi Islamaniacs.
Oil Speculators Charged In Price Manipulation
Oil Speculators Charged ? Federal regulators have charged five speculators for manipulating the price of crude oil. The five men reportedly pocketed $50 million from the scheme. It all took place sometime between January and April of 2008, which was during the time when the price peaked at $147 a barrel.
The speculators charged in the suit are Parnon Energy Inc. of California, Arcadia Petroleum of the United Kingdom, Swiss-based Arcadia Energy, James T. Dyer of Australia and Nicholas J. Wildgoose of California. The companies bought much of the crude oil in Oklahoma, which in turn caused it to look like there was a shortage. As many would expect a shortage means an increase in price.
The companies then sold ?short? contracts to other investors at higher prices, usually no more than $10 a barrel, but it starts to add up. The Commodity Futures Trading Commission, responsible for finding illegal actions in accordance to oil, continually check from companies manipulating oil prices. While many feel more investors and companies are doing such actions the CFTC is assuring it?s not happening.
To reassure that prices are being manipulated even more Obama has launched an investigation into more speculations. As of now the five companies responsible for the manipulation are said to receive civil charges resulting in a few fines here and there. Although it is possible that in the later the companies face criminal charges by the Justice Department.
NEW YORK (AP) ? The United States and other nations that depend on oil imports said Thursday they will release and sell 60 million barrels of crude from emergency stocks in an effort to ease the strain high oil prices are putting on the global economy.
The release by the International Energy Agency, a group of more than two dozen countries, covers only what the world uses roughly every 16 hours. But it was enough to send oil prices lower, at least for the moment.
In addition to helping the struggling economies of the U.S. and Europe, analysts said the move was meant as a rebuke to OPEC, which has refused to increase oil production to bring down prices.
It will be the largest sale of crude ever from world strategic reserves and only the third since the IEA was formed in 1974 after the Arab oil embargo. The IEA released oil in 2005 after Hurricane Katrina and in 1990 and 1991 after Iraq invaded Kuwait.
Half the oil will come from reserves in the U.S. Refiners who turn crude into gasoline will be able to bid on the extra oil and have it shipped to them from the salt caverns along the Gulf Coast where it is stored.
The IEA said high oil demand and shortfalls of oil production caused by unrest in the Middle East and North Africa threatened to "undermine the fragile global economic recovery."
The uprising in Libya has taken 1.5 million barrels of oil per day off of the market ? half a million barrels less than will be released each day by the IEA. The price of oil rose to nearly $114 per barrel in at the end of April, a level not seen since the summer of 2008.
Since then, however, oil prices had fallen considerably, and analysts questioned how much relief the move would provide the economy, and for how long.
One analyst, Andrew Lipow, said the timing of the announcement, a day after Federal Reserve Chairman Ben Bernanke delivered a negative outlook on the economy, suggests that industrialized countries are grasping for solutions. He said Americans should expect the price of gasoline to fall, but not dramatically, in the coming weeks.
I'll believe corporations are persons when Texas executes one.: LBJ's Ghost