Don't Count On Much Help From Government Crude Oil
October 20, 2000
The highly touted release of 30 million barrels of crude oil from the nation's Strategic Petroleum Reserve (SPR) may only yield an additional 250,000 barrels of home-heating oil according to the Energy Department. The oil is destined for fuel-short areas such as New England.
The Clinton Administration had originally estimated the move would provide three to five million more barrels.
- The Energy Department said if diesel fuel refined from the oil was also sent into the home-heating oil market, it could raise stocks to 2.5 million barrels.
- However, critics noted that truckers and other powerful market forces might block such a shift, making the estimate unrealistic.
Another factor limiting dispersal of SPR oil is the tight transportation market. The oil has overloaded one key terminal in Nederland, Texas, and as a result, some of the SPR crude probably won't be delivered until December.
Source: John J. Fialka and Alexei Barrionuevo, "Release of Oil Barely Helps Needy States," Wall Street Journal, October 20, 2000.
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