/
No immediate gas price relief from oil reserves

No immediate gas price relief from oil reserves


No immediate gas price relief from oil reserves

WASHINGTON — President Joe Biden on Tuesday ordered 50 million barrels of oil released from America's strategic reserve to help bring down energy costs. But don't expect much relief at the gas pumps any time soon.

Gasoline prices are at about $3.40 a gallon, more than 50% higher than a year ago, according to the American Automobile Association.

“While our combined actions will not solve the problems of high gas prices overnight, it will make a difference,” Biden promised in remarks. “It will take time, but before long you should see the price of gas drop where you fill up your tank.”

The government will begin to move barrels into the market in mid- to late-December. Gasoline usually responds at a lag to changes in oil prices, and administration officials suggested this is one of several steps toward ultimately bringing down costs.

Oil prices had dropped in the days ahead of the announced withdrawals, a sign that investors were anticipating the moves. But in Tuesday morning trading, prices shot up nearly 2% instead of falling.

The market was expecting the news, and traders may have been underwhelmed when they saw the details, said Claudio Galimberti, senior vice president for oil markets at Rystad Energy.

“The problem is that everybody knows that this measure is temporary,” Galimberti said. “So once it is stopped, then if demand continues to be above supply like it is right now, then you’re back to square one.”

Wyoming Sen. John Barrasso was among Republicans who criticized Biden's announcement. The No. 3 Senate Republican said the underlying issue is restrictions on domestic production by the Biden administration.

“Begging OPEC and Russia to increase production and now using the Strategic Petroleum Reserve are desperate attempts to address a Biden-caused disaster,” Barrasso said. "They’re not substitutes for American energy production.”

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.