US eyes strategic reserve to deflate oil price – report

Economy 7/13/2018, 9:49 PM
US eyes strategic reserve to deflate oil price – report

Some officials in the administration of United States President Donald Trump, who has been expressing frustration with the rise in prices of crude, are considering the possibility to flood the market from the country's strategic oil reserve, the Wall Street Journal wrote on Friday, quoting anonymous sources. Supply outages around the world have so far outpaced efforts in the Organization of the Petroleum Exporting Countries and a bloc of producers led by Russia to ramp up output to close the gap. Meanwhile, Trump is facing the mid-term election in November, a crucial point in his term.

As consumers and companies feel the impact of rising energy costs, effects of the government's tax cuts are being offset, possibly leading to voter dissatisfaction. However, the Federal Reserve today downplayed the significance of the phenomenon.

Turning to the strategic petroleum reserve, which is apparently still only being discussed, could weigh on market prices. The people familiar with the matter also said some of Trump's high-ranking aides are "strongly opposed" to the option. Fatih Birol, head of the International Energy Agency, last month reportedly said in private that the possibility to tap global inventories was being discussed within the organization.

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