Obama Releases Oil Reserves To Counter Lost Crude
Originally published on Fri June 24, 2011 7:01 am
RENEE MONTAGNE, Host:
And you can expect lower gas prices this summer. One reason: The White House is tapping the nation's Strategic Petroleum Reserve. Over the next month, the administration will sell 30 million barrels of government oil.
NPR's Jeff Brady has more.
JEFF BRADY: The administration says this is part of an international effort to address supply concerns. Trouble in Libya means there's one-and-a-half million fewer barrels of oil on the market each day. Combine that with the busy summer driving season, and the administration worries prices could start inching back up.
Patrick DeHaan with GasBuddy.com says tapping the reserve should send prices below the current national average of $3.61 a gallon.
PATRICK DEHAAN: The national average has already been moving lower almost every day here for the past five or six weeks or so. That will likely continue. We may see some accelerated drops here in the next week or so.
BRADY: As the government oil works its way through the market, the East and West Coasts likely will benefit the most.
Philip Verleger at the University of Calgary says that's because prices in the middle of the U.S. already are benefiting from extra supply, largely because of Canada's oil sands.
PHILIP VERLEGER: Consumers in the Midwest will not see as much because the price in the Midwest has already been much lower.
BRADY: Lower oil prices everywhere means lower profits for oil companies. That sent their share prices down Thursday. Still, administration officials say if gas prices start going up again, they could decide to release even more oil from the Strategic Petroleum Reserve.
Jeff Brady, NPR News. Transcript provided by NPR, Copyright NPR.