Trump considers tapping US oil reserve as prices at pump rise

Bloomberg

The Trump administration is actively considering tapping into the nation’s emergency supply of crude oil as political pressure grows to rein in rising gasoline prices before congressional elections in November, two people familiar with the situation said.
No decision has been made to release crude from the 660-million-barrel stockpile, known as the Strategic Petroleum Reserve, but options under review range from a 5-million-barrel test sale to release of 30 million barrels, said the people, who requested anonymity to discuss non-public deliberations. An even larger release is possible it were to be coordinated with other nations.
The national unleaded average gasoline price rose to $2.89, up 63 cents or 28 percent from a year ago, according to data from AAA. The US gasoline price average is expected to range between $2.85 per gallon and $3.05 per gallon through Labor Day, according to the group. And as average prices close in on $3 a gallon — they’re well above that in many locations — Trump hasn’t been shy about voicing his displeasure.
“Oil prices are too high, OPEC is at it again. Not good!” he said on Twitter in June. On the Fourth of July, Trump tweeted: “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!”
Oil prices have retreated since hitting a three-year high in New York at the start of the month, as the trade clash between the US and China threatens economic growth and, as a knock-on effect, oil demand. West Texas Intermediate, the US benchmark, settled at $71.01 a barrel, up 68 cents for the day but down 3.8 percent for the week. Analysts are split on the effect an SPR release would have and how long any impact would last. Depending on its size and timing, an oil sale might leave the market unmoved, or have a real, if fleeting, impact on prices.
“An SPR release would have a psychological impact on the market. It may not translate into lower gasoline prices, but it would immediately bring down crude prices, at least temporarily, until the market adjusts,” said Joe McMonigle, senior energy analyst at Hedgeye Risk Management LLC.