It’s really quite amazing how one year and an additional $21 per barrel of crude can change people’s attitudes. It was less than 12 month ago that the price per barrel of oil hovered around the $9-10 mark, and international officials across the globe pleaded with leaders of OPEC to trim production in an effort to bolster pricing, which had lagged for two years running.
Today, however, the tune is far different. A cold winter in the N.E. U.S., combined with per barrel pricing over $30 has consumers and local legislators screaming for action, with obvious good effect.
The Clinton administration responded to growing worries that oil prices are out of control by announcing on Wednesday more supplies were headed to U.S. ports, but cautioned that gasoline prices may move higher. Energy Secretary Bill Richardson, in what was billed as an energy "summit" with some 350 Northeast consumers, business owners and lawmakers, said the administration planned to take additional steps to ease the tight supply situation.
Those measures include intensified energy diplomacy with OPEC producers, whose cutbacks have drained worldwide inventories and tripled oil prices during the past year. The cartel is due to meet next month to decide whether to continue the production cuts or gradually pump more oil.
The Administration has also asked U.S. oil refiners to operate at full throttle, delaying routine maintenance, and it has not ruled out a release of oil from the nation's Strategic Petroleum Reserve.
So far the Clinton administration has faced the most political pressure from lawmakers and consumers in the Northeast, where homes and businesses are more dependent on heating oil during cold winter months. But with spring around the corner, the focus is now changing to gasoline prices.
Crude oil futures dipped below $30 a barrel in midday trading in New York, but gasoline prices briefly soared to a nine-year high of 85.05 cents a gallon on worries about low inventories as the summer driving season approaches.
Earlier this week, the government said retail gasoline prices soared to a nationwide average of $1.356 per gallon, the highest since Iraq invaded Kuwait in 1990. Late Tuesday, a report by the American Petroleum Institute showed U.S. stocks of gasoline fell by an unexpected 3.8 million barrels from the previous week at a time of year that supplies should be building.
As a short-term fix to boost supplies, an extra 15 million barrels of home heating oil from foreign suppliers will arrive in U.S. ports by the end of the month, Richardson announced.
But the longer term solution is to persuade the Organization of Petroleum Exporting Countries (OPEC) and other oil producers to pump more oil into
the market, he said.