The US Energy Department is set to release 30 million barrels from Strategic Petroleum Reserve. That sounds like a lot until you realize that 30 million barrels is equivalent to 3 1/3 days of transportation use.
The justification is that the ongoing situation in Libya has reduced production by 1.5 million bbl a day.
I see this as a measure to help Europe and specifically to continue the NATO mission against Mumar Khadafi. Europe gets imports from Libya and the lost production is affecting the economy in Europe with higher energy costs. So, while the SPR drawdown will not affect prices here in the US, it is meant to assist the Europeans deal with the ongoing fighting in Libya and ongoing unrest in the rest of the Middle East and oil-producing countries.
Prices at the pump in the US have moderated and even started to slide down despite the ongoing unrest overseas. Demand has moderated as people have adjusted to higher energy costs and people are shifting their spending to compensate for the higher costs.
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