Strategic Reserve to be Released

[Louisianagrl]

Some relief, maybe?!?!

(Washington, DC) -- The White House has confirmed that the Bush administration will release oil from the nation's Strategic Petroleum Reserve. Secretary of Energy Samuel Bodman says some oil reserves will be released now that Hurricane Katrina has crippled the nation's oil producing and refining industry when it slammed into the Gulf Coast. For days, lawmakers from around the country had been asking the Bush administration to release the reserves in an effort to try to stave off a surge in gasoline prices. Earlier this week, New York Senator Charles Schumer said, quote, "if there was ever a time to dip into that reserve, the time is now. We cannot tolerate 70-dollars a barrel."

Altogether, about six-point-five-million barrels of crude oil a day are imported along the Gulf Coast, largely to ports in Louisiana and Texas. Considering the damage some platforms may have suffered as a result of the storm, Schumer says it may be a few months before the U.S. is back online with shallow and deep-water drilling in the Gulf. (note: there's still a rig sitting in the middle of the Mobile Bay Bridge)

[Nellie Bly]

My question is, how will this help the refineries who do not have power right now? Without power, they cannot refine this influx of oil. It may hold prices in the short-term, but do they really think it's going to prevent us hitting the $3 mark in the next week or two?

[Louisianagrl]

My question is, how will this help the refineries who do not have power right now? Without power, they cannot refine this influx of oil. It may hold prices in the short-term, but do they really think it's going to prevent us hitting the $3 mark in the next week or two?

It already hit 3 bucks this morning here in Nap-town.

[Nellie Bly]

It's anywhere from $2.59 to $2.89 here, was still $2.59 by my house this morning...on one hand, it was expected to hit $3 by labor day but on the other, it probably won't drop back to below $3 after labor day now.

[markalot]

Yea, how is this going to help. Now we have even more oil that we don't have the capacity to refine.

[Nellie Bly]

Well, we have the capacity to refine it, just not the ability at present. Even if we could, barge traffic on the river is still shut down or restricted so what can't get up north via pipeline would sit until the all clear is given.

[jcarwash31]

I'm betting that it is going to oil refineries that are up and running, but now do not have a source for crude oil because many off shore riggs are down and they cannot receive imported oil into the Louisianna ports.

[Nellie Bly]

Right now, it won't make a difference if they are up and running, if they can't trasnport it to the northern parts of the US. What pipeline's are up will not be enough to handle the demand and the barges that are on the northern parts of the river right now are it until the water recedes or they're shown to be damage free.

[Louisianagrl]

The refineries along the coast took a hit. The one side of Grand Isle is the Mobil Gulf of Mexico operation. Parts of that island don't exist anymore. Meanwhile, there was major silt damage to places like Cocodrie and Port Fourchon, both of which have pipelines running through them.

[Handy Smurf]

I'm playin your role Logan
http://www.educationallearninggames.com/images/ultimate-stratego.jpg

[back2vinyl]

My question is, how will this help the refineries who do not have power right now? Without power, they cannot refine this influx of oil. It may hold prices in the short-term, but do they really think it's going to prevent us hitting the $3 mark in the next week or two?

This is a very good question. However, it would be political suicide not to release oil from the reserve at this point. This press release could reduce speculative bidding up of oil futures contracts, so it's still a good move even if it doesn't increase the supply of gasoline immediately.