Gas Prices Up 33 Cents 2 Weeks 2nd Largest Jump Ever, White House weighs tapping oil reserves

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Survey: Gas price in US jumps 33 cents in 2 weeks

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Reuters
March 6, 2011
NEW YORK — Gasoline prices in the United States posted their second-biggest increase ever in a two-week period, due to the rise in crude oil prices stemming from the turmoil in Libya, an industry analyst said Sunday.
The national average for a gallon of self-serve, regular gas was $3.50 on March 4, according to the Lundberg Survey of about 2,500 gas stations, up 32.7 cents from the previous survey on Feb. 18.
The gross price increase was the biggest since the 38.44 cent-rise that occurred in the Aug. 26-to-Sept. 9, 2005, period following Hurricane Katrina, according to survey editor Trilby Lundberg.

White House weighs tapping oil reserves

MATTHEW L. WALD | New York Times 
  March 6, 2011
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WASHINGTON -- The Obama administration is considering tapping the Strategic Petroleum Reserve in response to rapidly rising gasoline prices brought on by turmoil in the Middle East, the White House chief of staff, William M. Daley, said Sunday.
''It's something that only has been done on very rare occasions," Daley said on "Meet the Press" on NBC, adding, "It's something we're considering."
Administration officials have sent mixed signals about the possibility of opening the reserve, which would add supply to the domestic oil market and tend to push down prices.
Energy Secretary Steven Chu said on Friday that the administration was monitoring prices, but he has been reluctant to endorse more aggressive steps.
''We don't want to be totally reactive so that when the price goes up, everybody panics, and when it goes back down, everybody goes back to sleep," he said.
A few days earlier, Chu said the administration was watching the situation closely, but expected oil production that had been lost in Libya would be made up by production elsewhere.
Administration officials continue to emphasize the critical need for long-term steps to reduce oil use, like improving the fuel economy of cars and promoting battery-powered vehicles.
But recently, five Senate Democrats have called for opening the reserve, which is stored in four salt domes in Texas and Louisiana. And on Feb. 24, three House Democrats from New England, where oil is used to heat homes, wrote to Obama saying that while exporters could increase production, "they also profit from oil price spikes and therefore have little incentive to quickly respond with the increased supply needed to calm markets."
In recent days, prices for the American benchmark crude, West Texas Intermediate, have exceeded $100 a barrel. Oil for April delivery closed at $104.42 a barrel on the New York Mercantile Exchange on Friday.
The average price for a gallon of unleaded gasoline was $3.50 on Sunday, AAA reported, up from $3.12 a month earlier. Gasoline prices routinely rise as the weather gets warmer and people drive more, leading some experts to predict gasoline at $4 a gallon this summer.
The Strategic Petroleum Reserve was established in response to the Arab oil embargo of 1973-4. It was tapped most recently in September 2008 in response to Hurricanes Gustav and Ike. At that time, the Energy Department arranged "exchanges" with oil companies whose normal supplies had been interrupted; the oil companies later made restitution in oil. The last time the government sold oil from the reserve to address supply interruptions was in 2005, after Hurricane Katrina.
Sales were also made in January 1991 to calm global markets as the United States invaded Kuwait, which had been occupied the previous year by Iraq.
The government suspended oil purchases when prices were approaching a peak in 2008, before the recession began. In that case, members of Congress argued that acquisitions for the reserve were contributing to higher prices, harming consumers.
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