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Using the Strategic Petroleum Reserve is among options being considered by President Barack Obama to stem a three-week rise in U.S. gasoline prices, Interior Secretary Ken Salazar said.
Obama and Energy Secretary Steven Chu “are very involved and looking at all options,” Salazar told reporters in Washington today, when asked about a potential release of oil from emergency inventories. “No decisions have been made, so I can just say that all options are on the table and we will make sure we make the right decision.”
Salazar, who oversees energy production on federal lands and off the coast, was urged by lawmakers at a Senate Energy and Natural Resources Committee today to open more areas for oil and natural-gas production.
The cost of U.S. gasoline is tied to global crude prices, uncertainty about supplies from Iran and the Middle East and demand from China and India, Salazar said. The U.S. reserve, the world’s largest government-owned stockpile, was previously used in July and August, under an International Energy Agency effort to ease shortages of Middle East crude.
Gasoline (3AGSREG) at the pump, averaged nationwide, rose 1.8 cents to $3.716 a gallon yesterday from Feb. 26, according to AAA data. Prices, which have increased 43.8 cents so far this year, are 10 percent higher than a year ago. The price has climbed for 21 days in a row.
Crude oil for April delivery fell $2.01, or 1.9 percent, to settle at $106.55 a barrel on the New York Mercantile Exchange. The contract yesterday slid 1.1 percent to $108.56, ending the longest upward move since January 2010.
“Releasing oil from the Strategic Petroleum Reserve would be, at best, a short-term benefit,” Senator John Barrasso, a Wyoming Republican, said today in a statement. “This purely political move would cause more harm than good.”
The U.S. will have to buy oil to replenish the stocks released last year and any crude sold this year, Barrasso said. The Republicans, the energy industry and some Democrats oppose a release now, saying supplies must be available, for example, in the event Iran, facing sanctions over its nuclear program, blocks a shipping pathway for a fifth of the crude heading to the market.
Three House Democrats on Feb. 22 asked Obama to use the emergency inventories “to combat the rapid price escalations resulting from speculation.”
“We take no possible response off the table,” Jay Carney, the White House press secretary, responded.
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