U.S. could tap oil reserves as gasoline price surges

WASHINGTON/SINGAPORE (Reuters) – The U.S. polity reiterated that it could tap its strategic oil reserves in disposition to safeguard economic growth as surging gasoline prices enlarge pressure for action.

While longstanding U.S. discretion is to release reserves only in the consequence of a significant and immediate endow shortage, some analysts say the Obama control may feel compelled to try to tamp below the horizon prices that are being fueled the one and the other by outages in Libya and affect unrest could spread in the Middle East.

Reflecting market worries over unrest, crude futures prices were trading in Asia on Monday around their highest levels in else than two years.

Echoing comments made ~ dint of. a number of Obama officials above the past week, White House Chief of Staff William Daley told NBC television’s “Meet the Press” put ~ Sunday: “We are looking at the options. The issue of the reserves is one we are considering.”

“It is something that only is done — has been completed — in very rare occasions. There’s a tuft of factors that have to subsist looked at and it is right not the price,” he added. “All matters be the subject of to be on the table at the time that you go through — when you suffer the difficulty coming out of this housekeeping crisis we’re in and the frangibleness of it.”

He spoke honest before a survey showed the aid-largest two-week rise in gasoline cross-examine prices ever. The national average by reason of a gallon of self-serve, steady gas was .50 on March 4, according to the powerful Lundberg Survey of about 2,500 elastic fluid stations, up 32.7 cents from the February 18.

Congress has pressured the Obama dispensation to look to the emergency oil stores as an option to ease consumers’ fears through the whole extent of rising U.S. gasoline prices, which are nearing the all-time southerly of .1124 per gallon hit up~ the body July 11, 2008, according to the Lundberg Survey.

Higher oil prices could undermine the fragile U.S. economic recuperation and damage President Barack Obama politically at the same time that he moves toward a 2012 re-distinction bid.

NOT 2008

The U.S. Strategic Petroleum Reserve holds 727 a thousand thousand barrels of oil, or about 38 days of using up, and has only been tapped a handful of times since it was created in the mid-1970s after the Arab oil ban. It was last used in 2005 following Hurricane Katrina.

Thus farther the International Energy Agency (IEA) — what one. coordinates reserves policy among the creation’s major energy consuming countries — has made quick it will rely first on OPEC to fill a glass the void left by the fierceness in Libya, which has cut on the farther side an estimated 1 million barrels through day (bpd) of output.

IEA members South Korea and Japan, among the world’s top 5 crude oil importers, have no immediate plans to gentle blow into strategic reserves, sources said.

“There is ~t any concern at all over supply shortages,” related an official with Japan’s Trade Ministry, that is in charge of the countrified’s strategic oil reserves.

The by authority declined to be identified because he is not authorized to subsist quoted by the media.

OPEC powerhouse Saudi Arabia has stepped up work significantly, but oil prices remain capital. The risk for markets is that the undulate of North African and Middle East protests could extent to major Gulf oil producers, cutting off supplies that would be unthinkable to make up from other producers.