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Tapping U.S. Oil Reserve Would Have ‘Short-Lived’ Impact, EIA Says

Published 11/16/2021, 01:03 PM
Updated 11/16/2021, 01:27 PM
© Bloomberg. A vehicle refuels at a Chevron gas station in San Francisco, California, U.S., on Monday, Nov. 15, 2021. Gasoline pump prices hit a record in California as the most populace U.S. state grapples with the worst of a nationwide surge in energy prices ahead of the Thanksgiving holiday. Photographer: David Paul Morris/Bloomberg

© Bloomberg. A vehicle refuels at a Chevron gas station in San Francisco, California, U.S., on Monday, Nov. 15, 2021. Gasoline pump prices hit a record in California as the most populace U.S. state grapples with the worst of a nationwide surge in energy prices ahead of the Thanksgiving holiday. Photographer: David Paul Morris/Bloomberg

(Bloomberg) -- Releasing oil from the U.S. government’s strategic reserve would have a “short-lived” impact on soaring fuel prices, according to the U.S. Energy Information Administration.

“Our analysis shows that it’s generally short-lived -- a couple of months -- and that typically the other dynamics in the market would overtake any decrease in price,” Stephen Nalley, EIA acting administrator, said Tuesday during testimony before the Senate Energy and Natural Resources Committee. 

A release of 15 million to 48 million barrels over a short period would bring crude prices down by about $2 a barrel, or the equivalent to as much as 10 cents per gallon of gasoline, Nalley added. 

Restricting exports of domestic crude also do little because U.S. refiners rely on “tremendous” volumes of imported heavy crude that many of them are configured to process. 

As for natural gas, Nalley said prices have been primarily driven by domestic factors even as exports continue to grow as a share of total demand. While halting exports would immediately lower prices, it would also discourage production, he said. 

 

©2021 Bloomberg L.P.

© Bloomberg. A vehicle refuels at a Chevron gas station in San Francisco, California, U.S., on Monday, Nov. 15, 2021. Gasoline pump prices hit a record in California as the most populace U.S. state grapples with the worst of a nationwide surge in energy prices ahead of the Thanksgiving holiday. Photographer: David Paul Morris/Bloomberg

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