Oil released from US reserves

Oil released from US reserves
Sep 3, 2005

The Bush administration ordered the sale of 30 million barrels of crude oil from the government's emergency stockpile to halt runaway gasoline prices triggered by Hurricane Katrina.
   
President George Bush warned motorists to expect "a problem" with gasoline over the Labor Day holiday weekend when high prices and sporadic outages may interfere with Americans' final summer outings.
   
"Listen, we're going to have a problem this weekend when it comes to gasoline but we're addressing it," Bush told reporters while touring damage from the hurricane in Biloxi, Mississippi.
   
Issuing the formal order for the sale from the stockpile, Bush said in a statement that he had determined there was "severe energy supply interruption."
   
Retail gasoline stations in some US cities have run out of fuel as motorists rushed to fill up their vehicles. Retail prices have climbed by 30 to 50 cents a gallon since Katrina slammed into Louisiana and Mississippi on Monday.
   
The US market has lost daily gasoline production of about 42 million gallons or about 1 million barrels, equal to 10 percent of the nation's normal consumption, according to government estimates.
   
Eight refineries were shut and several others crippled from Katrina's 140 mile per hour winds and ensuing floods and power outages. The refinery disruption cut a total of about 2 million bpd of US refining capacity to make gasoline, heating oil, jet fuel and other products. One barrel holds 42 gallons. 
    
In Washington, Energy Secretary Samuel Bodman detailed the administration's plan to sell 30 million barrels of crude from the Strategic Petroleum Reserve and to prepare for the arrival of more than 1 million barrels per day of gasoline shipments from the International Energy Agency.
   
"I would expect there to be some decline in price but that is a function of the marketplace," Bodman said.
   
News of additional supply sent prices tumbling. October gasoline futures  settled down 22.53 cents at $2.1837 per gallon on the New York Mercantile Exchange, and October crude oil futures  settled down $1.90 at $67.57 a barrel.

http://www.tvnz.co.nz/view/page/411319/608611