President Clinton authorized a release of crude oil from the U.S. Strategic Petroleum Reserve on Friday, a move meant to help push down soaring prcies for motor fuel and home heating oil.
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/table>The move comes soon after Vice President and Democratic presidential nominee Al Gore publicly called for SPR releases to begin. Gore’s plan was in turn criticized by Republican presidential nominee and Texas Gov. George W. Bush as a bad proposal to try to make up for a failed energy policy by the Clinton-Gore administration.
In a 4 p.m. press conference Friday, Richardson officially announced the SPR release and said the amount of it would be 30 million barrels, the Associated Press reported.
The energy secretary said it was the right time to tap the SPR, as U.S. inventories are 19% lower than in 1999, almost 65% lower in New England, the article said.
Perhaps responding to Republican detractors, who accused the Clinton-Gore administration of using oil prices as an election issue, Richardson made sure to state that the decision was not political, AP noted.
Richardson also said the administration’s concern was not so much oil prices, but that Americans should have enough heating oil for the upcoming winter and that trucks would have enough diesel fuel to keep running, AP and CNN reported. The release should add be-tween 3 and 5 million barrels of heating oil, which is virtually the same as diesel.
The SPR release was an action long sought by many, including the trucking industry. American Trucking Associations President Walter B. McCormick Jr. was part of an industry delegation that met with Richardson Wednesday afternoon to again press for that move. The group had emphasized the economic damage already done to the industry with the cost of diesel rising 73% over the last 18 months. McCormick also put the request forward in the national media the next day, with a live appearance on CNBC television network’s “MarketWatch” report and comments in a Washington Post news story that appeared that morning.
McCormick issued a statement late Friday saying, "the president did the right thing opening the Strategic Petroleum Reserve," and that the action helps protect the U.S. economic expansion. He noted that ATA, its member motor carriers and those in Congress who support the trucking industry have been strong advocates of this action.
While the SPR announcement came after the crude oil markets closed Friday, the mere speculation of the SPR release was enough to put prices on a downward track, Bloomberg re-ported. Crude oil fell almost 4% or $1.32, to $32.68 a barrel on the New York Mercantile Exchange, which was a one-month low. Prices on London’s International Petroleum Exchange fell 4.5%, or $1.48, to $31.25 per barrel, the report said.
.S. East Coast gasoline and heating oil prices for October futures fell several cents per gallon each, Bloomberg also noted.
Prior to the announcement of the SPR release, OPEC President Ali Rodriguez said any such action would only cause a temporary decrease in oil prices worldwide, the Associated Press reported. The world market needs what is called sweet crude to ease shortages of fuels such as gasoline, and the SPR is mainly stocked with solid crude, Rodriguez said in a television interview.
