"The US stands ready to do more as is necessary to address this issue," a senior US official told reporters on condition of anonymity, adding that Washington would review the supply situation after one month.
International Energy Agency countries said earlier Thursday that they would draw down 60 million barrels from strategic oil stocks to make up for the loss of Libyan output.
The drawdown, only the third in the history of the IEA, was intended to complement "expected increases in output" by the major oil producing countries, the IEA said in a statement.
The US Department of Energy said that of the total, it would release 30 million barrels from its stocks, which at 727 million barrels were at a historic high.
That news dropped West Texas Intermediate crude prices to under $90 a barrel yesterday, but the oil price drop was short lived as oil rebounded to $92 a barrel after the news. The price rally? "Nothing has changed" in the fundamental global demand for oil, according to market watchers. Increasing the supply hasn't done much to convince speculators that the price won't continue to go up.
Funny how even supply disruptions cause big price spikes, but supply overages "don't change the price fundamentals." The usual suspects of course wasted no time in attacking the President.
President Barack Obama took withering fire from the oil industry and Republicans for agreeing to release the nation's emergency oil supplies, a decision that senior officials said was prompted by the need to prop up the ailing economy.
Critics blasted the release of 30 million barrels of oil -- half of a global injection coordinated by the International Energy Agency -- as an ill-timed misuse of reserves at a time when U.S. supplies are relatively high, despite the loss of Libya's exports for the past three months.
Some OPEC officials went further, calling it a political ploy that ignored Saudi Arabia's promise to step up production and the fact that oil prices had already fallen sharply.
But the move fueled questions about the timing and catalyst for releasing the stocks, which in the past have been reserved to address abrupt disruptions like natural disasters.
Remember when Republicans were attacking Obama for oil prices when they were approaching $115 a barrel because he "wasn't doing anything to increase oil supply" and that the American people "deserved relief at the pump?"
Obama does something and Republicans attack him for doing what they wanted him to do. That's how it works. And then they blocked Democratic efforts to lower oil subsidy payments to companies making billions.
Oh, and $3.50 a gallon instead of $4.00 a gallon is "a sharp drop" in prices? We're supposed to feel sorry for the oil industry, which made tens of billions in profits last year. You know where the GOP stands...whatever the opposite of Obama is doing.
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