U.S. to release 300 million barrels from SPR

In a bid to bring down high oil prices, the U.S. has decided to release some of its strategic petroleum reserve (SPR), a stockpile of oil saved for emergency situations and war, for the first time since the Gulf War in 1991. Consequently, oil prices have stabilized somewhat.

U.S. Energy Minister Bill Richardson announced Friday that President Bill Clinton ordered the release of 300 million barrels from the SPR in installments of 10 million barrels a day for 30 days beginning Sept. 25 for winter heating.

Thus the 300 million barrels will circulate in the market from November.

Energy Minister Richardson asserted that the time is right for the release of the SPR and if necessary, the government is ready to release more. This indicates that more SPR will be released if oil prices do not stabilize this time around.

After the announcement of the U.S. government's release of the SPR, oil prices dropped considerably. The price of West Texas Intermediary oil set for October delivery fell as much as $1.95 from the previous day to end at $32.34 a barrel on the New York Mercantile Exchange. Moreover, the price of Northern Brent blend for October delivery fell by $1.73 from the previous day to end at $30.76 on the London market. The Dubai blend set for November delivery, the type that Korea imports the most, also fell by $1.17 to end at $29.21, dropping to the $29 level in a week.

The office of the premier of the U.K. welcomed the release of the SPR and stated that oil prices will hopefully be stabilized as a result of this action.

Kuwaiti oil minister Sheik Saud Nasser al-Sabah also expressed hope that the released SPR will stabilize oil prices. He asserted that Kuwait is continuously encouraging oil-producing nations to increase production.

On the other hand, Ali Rodriguez, chairman of OPEC and concurrently Venezuela¡¯s oil minister, stated that oil prices will fall only temporarily.