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| U.S. Fills Strategic Oil Reserves To Highest Level Ever |
| 2004-05-17 |
| Caught Via Drudge With crude oil trading above $41 a barrel and terrorism fears helping to inflate the price, the U.S. has quietly continued to fill its emergency reserves to the highest level ever -- an amount experts say could be used to bring prices down, Monday’s Wall Street Journal reported. To guard against shortages, the U.S. and other nations have a combined 1.4 billion barrels of oil stored away, as governments have been steadily adding to their stocks since the shock of Sept. 11, 2001. Experts say oil markets have ignored that supply amid fears terrorist activity could reduce Middle East oil exports. The market’s apparent disregard for that safety net has some analysts questioning whether the U.S. should use the reserves -- or even just threaten to use them -- to help calm the market and signal to the Organization of Petroleum Exporting Countries that the U.S. won’t tolerate actions to maintain high prices. Terrorism fears have resulted in a so-called terrorism premium that has pushed up crude prices as much as $5 to $10 a barrel over what supply and demand would suggest, some experts say. The rise of crude-oil prices will be the focus of attention this week when the world’s oil producers and consumers gather in Amsterdam for the International Energy Forum, a summit to discuss the market and how to better manage energy supply and demand. Among other things, OPEC and the International Energy Agency will be grappling with why prices have soared, even though supplies seem adequate. Actually, refinery capacity and formulation requirements are the reasons we’re paying $2.37 for regular in San Diego |
| Posted by:Frank G |
| #8 Refinery capacity problems can be summed up with "Not in MY backyard!" Formulation issues arise whenever supply of the 'special' gas can't make it in a timely or efficient manner. Chicago had sky-high prices a year or so ago, thanks in large part to a pipeline problem down around St. Louis. |
| Posted by: eLarson 2004-05-17 3:33:26 PM |
| #7 forgot to add a comment: remember when AlGore pleaded with Clinton to open the Strategic Reserve before the election? W fills it in case of a calamity...who's got the nation's interest ahead of his own? |
| Posted by: Frank G 2004-05-17 3:25:53 PM |
| #6 How high -- and for how long -- does it need to go before capped wells in the US are re-opened? I remember wells in Ohio running in the late '70s; they're all capped now. They're not dry, but usually they cost more to run than they can earn. |
| Posted by: Robert Crawford 2004-05-17 3:13:14 PM |
| #5 Lone Ranger - If the $50pb mark is hit, it will probably knock the China and India recovery out. Then the market rate will go down again. |
| Posted by: mhw 2004-05-17 3:10:20 PM |
| #4 Strategic reserves increased. Common sense don't you think? No big deal. |
| Posted by: BigEd 2004-05-17 1:23:30 PM |
| #3 I'm tending to believe that the price of oil is headed up mainly because China and (to a lesser extent) India are rapidly adding to demand, at levels unanticipated by the refineries. If this is, in fact, the case, then oil is headed upwards of $50 per barrel. That should prove interesting. Total speculation on my part. |
| Posted by: Lone Ranger 2004-05-17 12:17:18 PM |
| #2 Frank, don't forget the 50 cents plus in taxes on that gallon. |
| Posted by: Chuck Simmins 2004-05-17 11:44:39 AM |
| #1 What the US governement has done is admirable, but unfortunately in terms of supply coverage, that is the number of days the reserve will cover imports, it has been steadily declining as US oil imports increases. From memory at one point it covered 80 days supply that has now declined to 50 days (as the reserve has increased). America MUST get off imported oil. |
| Posted by: Phil B 2004-05-17 11:38:42 AM |