Clinton Sets Aside Fuel Reserve; Oil Drops Further

With new reports that OPEC appears headed toward a new production boost, and with President Clinton planning to tap the U.S. Strategic Petroleum Reserve to create a home heating oil reserve, oil prices were falling again in commodity markets Monday.

News wire reports said crude prices were already down on hints that other nations besides Saudia Arabia were poised to back the Saudi idea to increase production another 500,000 barrels daily. However, prices fell further, according to CBS MarketWatch, after news that Clinton would set aside 2 million barrels from the SPR to head off a repeat in coming months of last winter's severe supply crunch for heating oil in the Northeast.

Since diesel and heating oil are so similar, a reserve that holds down price fluctuations for heating oil could be expected to smooth prices as well for the dominant fuel used by the trucking industry.