The USA strategic petroleum reserve
Oh this is sweet... The USA maintains a reservoir of petroleum in storage for the event of disruption of our imported oil. Under the Clinton administration, this was drained to a very low level to help bolster the economy by artificially depressing the true price of oil. President Bush has been filling this reserve back up to it's designed operating levels because of heightened problems in the Middle East.
The Organization of Petroleum Exporting Countries just asked the USA to do the following:
From the
International Herald Tribune
bq.
OPEC asks U.S. to tap oil reserves
The Organization of Petroleum Exporting Countries has called on the United States to dip into its strategic petroleum reserve to help deflate oil prices, the cartel's president said Wednesday.
bq. "We had communication with them," OPEC's president, Purnomo Yusgiantoro, told reporters, referring to U.S. policy makers. "I asked them to use their reserves."
bq. Purnomo, who is also Indonesia's oil minister, did not describe Washington's response.
bq. Crude prices were down slightly after the comments. Crude for December delivery was at $55.05, down 12 cents, in premarket trading on the New York Mercantile Exchange.
bq. Oil prices have soared around 70 percent this year, to over $50 a barrel, on rapid demand growth that has strained global supply and left OPEC members little spare production capacity to cool prices.
bq. The Bush administration has consistently rebuffed calls to use U.S. emergency reserves to reduce prices. The reserve was set up after the 1970s Arab oil embargo as a counterweight to OPEC's market power. The White House says only a severe supply disruption would warrant a release.
bq. Analysts said Purnomo's request to Washington was unusual, as OPEC usually regards government stockpiles as a threat to its own market influence.
bq. "The OPEC president has the mandate to make unilateral approaches on behalf of the whole organization," an OPEC official said. "He has already called on all producers to raise output, so it's not really a departure from that policy. It is an irony though."
bq. In a report Tuesday, the International Energy Agency stressed the need for oil-producing countries and international oil companies to increase their investments in finding and pumping oil.
bq. The agency said there were sufficient oil reserves to meet demand for at least the next 30 years. But it said that not only would oil companies have to increase their spending, oil-producing countries would also have to allow more outside access to their reserves.
bq. It predicted that world oil demand would grow about 50 percent, to 121 million barrels a day, by 2030. To meet that growth, the industry would have to spend about $105 billion each year "from the wellhead to the consumer," according to the agency, an adviser to oil-consuming nations.
bq. The agency acknowledged in its annual report, the World Energy Outlook, that it failed to foresee the growth in demand for oil by China but said that its predictions should improve now that China had agreed to share its data on production and consumption.
bq. The report warned of a drop in oil production and shortfalls in supplies if oil companies and oil-producing countries do not make huge investments, totaling $3 trillion over the next three decades, in everything from developing new fields to building more tankers, pipelines and refineries.
bq. "The availability of oil in terms of reserves and geology isn't an issue but the problem is whether the oil can find the money," Fatih Birol, chief economist of the International Energy Agency and the principal author of the report, said in an interview.
bq. "Will that strategic meeting take place?"
No F-in' way...
Posted by DaveH at October 27, 2004 10:20 AM