Congress To Sell 1-Million-Barrel Emergency Gasoline Stock

Congress is preparing to sell an emergency gasoline reserve that was set up in the wake of Hurricane Sandy as it has never been used and, because of that, the point of its existence has become questionable.

Bloomberg recalls that the Northeast Gasoline Supply Reserve was set up in 2014 after Hurricane Sandy cut through refineries and fuel terminals, which resulted in fuel shortages in some parts of New York. Some fuel stations were left without gasoline for a whole month.

In 2017, President Trump wrote that it "does not have the operational functionality that was envisioned post-Sandy." 

The Northeast Gasoline Supply Reserve is not exactly a huge one but, according to Bloomberg, it could have acted as a cushion in case of a further gas price rise. Not everyone agrees, however. Per the managing director of ClearView Energy Partners, the Northeast Gasoline Supply Reserve is "too small to make a difference and too big to be cheap." 

Gas prices across the United States have risen to the highest point in more than a decade for this time of the year. The national average stood at $3.811 per gallon on Tuesday, which was the highest since September 2014.

The price rise could be a cause for concern for the federal government because it comes at the end of summer and peak driving season. Normally, at this time of the year, as demand for fuels begins to decline, so do prices. This year, however, this has not been the case, at least yet.

Meanwhile, global oil prices are on the rise, too, as Saudi Arabia and Russia said they would extend their supply curbs further. The extension would see global supply trimmed by 1.3 million bpd until the end of this year. Following the news, Brent crude topped $90 per barrel, with West Texas Intermediate jumped over $86 per barrel.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Soars Above $90 As Saudi Arabia Extends Deep Output Cuts
• BMW: Gasoline Car Ban Poses "Imminent Risk" To European Automakers
• Commodity Trader Trafigura Sees Upside Risk For Oil Prices