Obama Consults Experts Over Tapping Emergency Oil Reserve
Release of up to 180 million barrels discussed at White House meeting
With benchmark Brent oil futures moving back over the $110 per barrel line and threatening to continue to slow down an already sluggish American economy, President Barack Obama met Thursday with oil market experts as it considers dipping into the Strategic Petroleum Reserve (SPR).
Analysts speculate that this second release of emergency oil reserves could be much larger than the last as officials attempt to bring soaring fuel costs under control while also making up for lost production centered around the passing of Hurricane Isaac last week. While gas prices were expected to drop sharply following the Labor Day weekend, high prices have persisted, forcing the Obama administration’s hand in reopening plans that were originally shelved in the spring.
Tapping into the SPR is a weapon the Obama administration is not afraid to use, as seen during last year’s civil war in Libya when loss of oil production in that country caused the U.S. to sell reserve oil. That move came with the support of many important nations; this time around, support for a second release in one year has been slow to gain traction, especially in light of rumors that this release could be up to 180 million barrels.
Coupled with a deadly explosion in Venezuela that has crippled production in the world’ second largest refinery, the continued effects of Hurricane Isaac on the many refineries and drilling projects surrounding the Gulf of Mexico have seen production drop to a one-year low over the last week, prompting early speculation that a dip into the SPR would be necessary in order to maintain reasonable fuel pricing levels.
But politics are likely playing a factor too; with elections right around the corner, the president wants to show voters that he’s combating high fuel prices and providing relief to a strained economy.
Despite analysts’ predictions of a decision this week, however, sources quoted by Reuters say that this meeting was an information gathering session only; the White House has yet to make an official comment.