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| Bush orders general sale of emergency crude oil |
| 2005-09-03 |
| WASHINGTON v - The Bush administration on Friday ordered the sale of 30 million barrels of crude oil from the governmentâs emergency stockpile to halt runaway gasoline prices triggered by Hurricane Katrina. President George W. Bush warned motorists to expect âa problemâ with gasoline over the Labor Day holiday weekend when high prices and sporadic outages may interfere with Americansâ final summer outings. âListen, weâre going to have a problem this weekend when it comes to gasoline but weâre addressing it,â Bush told reporters while touring damage from the hurricane in Biloxi, Mississippi. Issuing the formal order for the sale from the stockpile, Bush said in a statement that he had determined there was âsevere energy supply interruption.â The US market has lost daily gasoline production of about 42 million gallons or about 1 million barrels, equal to 10 percent of the nationâs normal consumption, according to government estimates. Eight refineries were shut and several others crippled from Katrinaâs 140 mile per hour winds and ensuing floods and power outages. The refinery disruption cut a total of about 2 million bpd of US refining capacity to make gasoline, heating oil, jet fuel and other products. One barrel holds 42 gallons. In Washington, Energy Secretary Samuel Bodman detailed the administrationâs plan to sell 30 million barrels of crude from the Strategic Petroleum Reserve and to prepare for the arrival of more than 1 million barrels per day of gasoline shipments from the International Energy Agency. âI would expect there to be some decline in price but that is a function of the marketplace,â Bodman said. News of additional supply sent prices tumbling. October gasoline futures HUV5 settled down 22.53 cents at $2.1837 per gallon on the New York Mercantile Exchange, and October crude oil futures CLV5 settled down $1.90 at $67.57 a barrel. Germany, Spain and France said they were prepared to ship fuel to the US market as part of the IEA plan. âThe amount of refined product versus crude that they will offer has not been determined... their intentions are to provide the maximum amount of refined product within their requirements,â he said. The government is also loaning 9.1 million barrels of crude from the reserve to several refiners whose supplies were disrupted by the storm. The loans must be repaid in kind at a later date. The government does not have a similar stockpile of gasoline for emergencies, which is why it turned to the IEA for help. Industry experts said they were relieved to see the government act. âThe one thing the market doesnât have is time and the administration reacted expeditiously this time. This was good,â said Larry Goldstein, president of the Petroleum Industry Research Foundation. |
| Posted by:Steve White |
| #2 keeps Schumer and other unpatriotic Democratic critcs/limelight grabbers at bay, principally, secondarily lets Americans know "something is being done" |
| Posted by: Frank G 2005-09-03 15:53 |
| #1 ..Okay, I'm a bit confused - what - if any - effect will this really have? Mike |
| Posted by: Mike Kozlowski 2005-09-03 14:08 |