I used to think the operative word in Strategic petroleum Reserve was "Strategic" but Politico has it as their lead story.
The Houston Chronicle's headline is "Texas Republicans, oil industry slam Obama decision to open Strategic Petroleum Reserve" while NPR's It's All Politics blog says "Obama Decision To Tap Oil Reserve Gives New Fuel To Partisan Energy Debate".
Here's Forbes with another angle:
Today the International Energy Agency announced that it would release 60 million barrels of oil from global stockpiles. More than half of that will come from the U.S. Strategic Petroleum Reserve.From Reuters:
Crude oil prices and shares of oil companies plunged on the news, with Brent crude down more than $6 to $107 per barrel and West Texas Intermediate off $5 to $90. Shares of ExxonMobil, Chevron and Occidental Petroleum were all down 3% in mid-morning trading. The Dow was down 220 points.
The timing of this move comes just days ahead of the end of the Federal Reserve’s second quantitative easing program. In the absence of continued Fed buying of Treasuries, and the liquidity it adds to the financial markets, moving to reduce oil prices will be another helping hand to the U.S. economy. Knocking $20 a barrel off oil prices would reduce America’s annual oil spend by some $150 billion....MORE
...ANALYST COMMENTSAnd from Reuters via ZeroHedge:
HELEN HENTON, HEAD OF COMMODITY RESEARCH, STANDARD CHARTERED BANK
"It's a significant amount, we predict the increase in demand for OPEC crude will be up 1.4 million barrels per day for Q3 compared to Q2, so it's in excess of that. The timing is very strange though. It comes after the Saudis said they would increase output so it suggests they think this might not be enough. I think it will knock prices lower, I expect prices to be lower a month from now."
MATT SMITH, ANALYST AT SUMMIT ENERGY IN LOUISVILLE, KENTUCKY
"It's difficult to understand the logic behind why IEA is doing this now. The market was taken by surprise because this was after Trichet's comments this morning and the bearish news from the Federal Reserve.
"We already knew that the market would tighten in the second half of the year. This is a preemptive measure to keep prices below triple digits on WTI crude.
"If they are going to release the 60 million barrels over a course of a few months, then they will be matching off the Libyan outage. Still, it would have made more sense if they did this immediately after the OPEC meeting. It looks like they missed their opportunity there. We were led to believe that OPEC was going to increase supply."
CHRISTOPHE BARRET, OIL ANALYST, CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
"It's a question of need. I'm not sure we need more oil. There's been weakness of demand and I don't see what the release of 60 million barrels of oil adds to the market. We don't need it in terms of levels of stocks, we are 35 million barrels above the five year average already. It's the equivalent of two months Libyan production, so I'm not sure it will make much difference."...MORE