As gas and oil costs rise, Congress is using Middle East turmoil as a reason to utilize the U.S. strategic oil reserve. Politicians are urging the Obama administration to open the spigot, despite a worldwide surplus of oil production capacity. United States supplies of oil and gas are also far above average seasonal levels. Tapping into the strategic oil reserve could have the opposite effect, energy analysts say, and the administration does not think gas prices have raised high enough to warrant such a drastic measure. Resource for this article – Why tapping U.S. strategic oil reserves will not lower gas prices by MoneyBlogNewz.
Oil reserve tapped by Congress/span>
The U.S. strategic petroleum reserve, the largest in the world, contains 727 million barrels of oil, its full capacity. Nationwide, the average price of a gallon of gas has risen 28 cents in the past 10 days. To be able to stabilize oil costs and keep oil supplies from being disrupted, Senator Jeff Bingaman, D-N.M., has suggested as Senate Energy and Natural Resources Committee chairman that a major portion of the oil reserve be sold. Other politicians suggest that not only would gas prices be helped by this sell, however billions might be elevated to help work on the deficit and to help give tax breaks for electric automobiles and hybrids reducing oil consumption.
Lots of U.S. oil still accessible/span>
About $500 million of oil from the reserve would be sold to fund projects with the 2012 budget although the Obama administration is saying no to sell a part of the U.S. strategic petroleum reserve as part of the spike in gasoline and oil costs. What the administration believes is that, when the U.S. isn’t at all running low on oil, it would send a panic that is false to consumers. You will find record inventories in the Oklahoma major oil storage facility. There is production in North Dakota right now. Also, the United States has a pump from Canada getting some of the fuel. United States crude oil inventories, according to the U.S. Energy Information Administration, are at 346.4 million barrels. There are 9.86 billion gallons of U.S. gasoline in the inventories. For this time of year, the amounts of the inventories are both higher than normal.
Fixing oil costs that rise and drop/span>
The Obama administration is making a good decision, oil industry analysts suggest. It would make individuals driving up the gasoline costs more fearful while doing nothing else to oil and gas costs. Those who oppose tapping the reserve believe that instead of an oil supply shortage, a shortage in surplus production capacity is the real issue. Speculators are betting that spreading Middle East unrest will reduce surplus oil production capacity. The oil price problem would become a severe problem if the surplus oil production capacity perished off. Adding the capacity to produce more oil rather than a temporary infusion from the strategic oil reserve will put the international oil markets at ease.
Information from/span>
New York Times
nytimes.com/2011/03/04/business/energy-environment/04oil.html?_r=1
Foreign Policy
oilandglory.foreignpolicy.com/posts/2011/03/04/the_weekly_wrap_march_4_2011
UPI
upi.com/Business_News/2011/03/03/Crude-oil-supplies-fall-slightly/UPI-22221299189942/
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