A release of oil from the U.S. Strategic Petroleum Reserve (SPR) would likely have only a short-lived impact on oil markets, the acting head of the U.S. Energy Information Administration (EIA) said on Nov. 16.
The Biden administration has considered tapping the reserve to cool rising oil prices that are helping to fuel inflation. But Stephen Nalley, the acting EIA chief, told a Senate hearing:
“Ultimately the amount of impact would be relatively short-lived, and would depend on how much was released.”
Nalley said the impact on oil markets could last only a few months and that other dynamics in the market would overtake any decrease in prices.
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An EIA analysis showed that a release of 15 million to 48 million barrels from the reserve could bring prices down about $2 a barrel and push gasoline prices at the pump down about 5 cents to 10 cents per gallon for a short period of time, Nalley said.
U.S. oil prices hit a seven-year high in late October of nearly $85.50/bbl. They were trading at about $80.60/bbl on Nov. 16 as forecasts for an increase in global production in coming months put pressure on the market.
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