US to release 50 million barrels of oil to ease energy costs
WASHINGTON (AP) — President Joe Biden on Tuesday ordered 50 million barrels of oil released from the nation's strategic reserve to help bring down energy costs, in coordination with other major energy-consuming nations, including China, India and the United Kingdom.
The move is aimed at global energy markets, but also at voters who are coping with higher inflation and rising prices ahead of Thanksgiving and winter holiday travel.
Gas prices are at about $3.40 a gallon, more than 50% higher than their price a year ago, according to the American Automobile Association.
Administration officials said that reports of a possible release and consultations with other countries ahead of the announcement had caused oil prices to drop nearly 10% in anticipation of the news.
The government will begin to move barrels into the market in mid to late December.
There was no discernable impact on the price for a benchmark barrel of US crude right after the announcement.
Prices have been up and down all month, and were up less than 1% so far in this holiday shortened week.
Biden has scrambled to reshape much of his economic agenda around the issue of inflation, saying that his recently passed $1 trillion infrastructure package will reduce price pressures by making it more efficient and cheaper to transport goods.
Republican lawmakers have hammered the administration for inflation hitting a 31-year high in October. The consumer price index soared 6.2% from a year ago — the biggest 12-month jump since 1990.
Senate Republican Leader Mitch McConnell tore into the White House in a floor speech last week, saying the victims of higher prices were middle-class Americans.
“The three biggest drivers of the staggering 6.2% inflation rate we logged last month were housing, transportation, and food,” the Kentucky senator said. “Those aren't luxuries, they're essentials, and they take up a much bigger share of families' budgets from the middle class on down.”
The Strategic Petroleum Reserve is an emergency stockpile to preserve access to oil in case of natural disasters, national security issues and other events.
Maintained by the Energy Department, the reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts.
There are roughly 605 million barrels of sweet and sour petroleum in the reserve.
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