As gas prices continued to climb yesterday, industry analysts are predicting the increasing likelihood that the US will draw from its strategic oil and gas reserves in the face of Storm Isaac, making its way across the Gulf of Mexico and threatening to disrupt supplies.
The storm-turned-hurricane has led to the evacuation of oil platforms in the Gulf and a 78% reduction in Gulf oil output, while an explosion and ensuing fire at Venezuela’s largest refinery earlier this week has also cut supplies.
The White House has hinted that it may dip into strategic reserves, but so far has not committed to the move. Drawing from the strategic reserves this close to elections would expose the Obama administration to intense criticism from the Republican camp, which would accuse him of maneuvering to lower gas prices ahead of presidential elections.
By. Charles Kennedy of Oilprice.com