Oil reserves released despite falling gas prices in SC
Thu, 23 Jun 2011 16:27:16 GMT —
COLUMBIA (WACH) -- The U.S. Department of Energy is set to release 30 million barrels of oil from the Strategic Petroleum Reserve for the first time since Hurricane Katrina in 2005.
The International Energy Agency says the agreement by the Obama administration, along with 27 other countries, will help offset disruptions prompted by the war in Libya.
All together, 60 million barrels will be added to the market in a move that, the Paris based agency says, will "exacerbate the shortfall further." Officials also say the current oil market could "undermine the fragile global economic recovery."
But will the release impact the local price of gas? The executive director of the South Carolina Petroleum Marketers Association says it's possible, but there's no guarantee.
"It has the potential to lower prices, but certainly because it's a global commodity and there's so many other factors that come into petroleum pricing," Michael Fields explains. "There's no guarantee, but it certainly is a nice bit of news, I think, for consumers in South Carolina."
Here in the Midlands, the average cost of a gallon of unleaded has been declining for weeks.
Democratic Congressman Jim Clyburn of South Carolina applauds the decision.
"This is welcome news for all Americans struggling with uncertain and, for many, unaffordable prices as the gas pump," Rep. Clyburn says. "By opening up the reserves, we can ensure a stable supply of oil and hopefully stave off wild fluctuations in gas prices while we are in the peak summer driving season.Related Stories... AP poll: Economic worries pose new snags for Obama Gas prices down to $3.40/gal in Columbia Metro area Gas prices a relative bargain for SC travelers
This is the third time in history the IEA has decided to release stocks according to its Executive Director, Nobuo Tanaka.
I expect this action will contribute to well-supplied markets and to ensuring a soft landing for the world economy, Tanaka said in a news release Thursday. Read the full announcement by clicking here.
The U.S. stores hundreds of millions of barrels in underground salt caverns in Texas and Louisiana. Over 700 million barrels are stored worldwide.
Two million barrels will be made available every day for 30 days in the coming month.
"It certainly eases any concerns that the Libyan disruption which, I think, is about 1.5 million barrels a day," Fields adds. "I think that's going to ease some of the tensions or concerns we have nationally."
What do you think about the announcement? Do you think you'll see a price drop at the pump? Leave your thoughts below and check back tonight on your WACH Fox News to see if we share what you have to say.