On June 23rd, the Obama administration announced its plan to delve into the Strategic Petroleum Reserve and release 30 million barrels of oil over the next 30 days, constituting half of the 60 million barrels that the nations in the International Energy Agency plan to bring to market in the next month. This strategy move plays a role in the coordinated international effort to reduce high crude prices and offer a helping hand to the world's most industrialized countries as they begin to revive their economies (Banerjee). .
"We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery," said Energy Secretary Steven Chu. "As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary" (Banerjee). .
Since February, crude oil prices have stayed above the $100 a barrel mark, peaking at $113.93 on April 29. As the economy has continued to struggle, prices have begun to decrease. Obama's recent announcement caused the oil prices in the U.S. and Europe to take a dive. Immediately after the announcement, oil futures decreased to $91.39 a barrel, a decrease of $4.02, the lowest price since February. The price was down as much as $5.72 a barrel in earlier trading on the New York Mercantile Exchange (Banerjee). .
Although the absence of Libyan oil does not constitute a shortage of oil in the world, the fighting in Libya has caused a loss of about 1.5 million barrels of oil per day from global markets, according to the Energy Department. However, other Arab oil producers are increasingly becoming nervous about their own unrest. This, along with the revival of the Chinese and Indian economies, has caused crude prices to increase to painstakingly high levels (Banerjee). .
"Crude and gasoline inventories are above average, and crude and gasoline prices have been trending down for weeks, despite the loss of Libyan oil, which markets have already adjusted to," said American Petroleum Institute spokesman Bill Bush (Power).
