facebook
twitter
rss
account
search
search

France willing to tap strategic oil stocks

March 30, 2012 at 6:34 AM   |   Comments

PARIS, March 30 (UPI) -- France is willing to release oil from its strategic reserves to help tamp down the soaring world price of crude oil, Energy Minister Eric Besson says.

The official, speaking after a Cabinet meeting Wednesday, said France is open to releasing some of its strategic reserves in coordination with the United States and Britain to help counter high prices.

"The United States asked for it and France welcomed the idea," Besson said, adding that Paris is "now awaiting the opinion of the International Energy Agency" on the possible move.

Light, sweet crude oil for May delivery ended at $105.41 per barrel Wednesday, down $1.92, or 1.8 percent. Analysts partly attributed the drop to France's signal on strategic reserves.

Brent crude oil, meanwhile, fell $1.10 per barrel to $124.16.

Washington and London indicated this month they are considering a coordinated strategic reserve drawdown to address the high price of crude, which has been bid up due to fears of a possible military strike on Iran's nuclear research facilities and rising demand from developing nations such as China and India.

"It's looking more and more like they are going to go ahead and do it," Carl Larry of trading adviser Oil Outlooks and Opinions told The Wall Street Journal, adding such a move could lower futures prices to $100 per barrel in the short term.

The French newspaper Le Monde reported a tapping of the strategic reserves could happen in "a matter of weeks."

Rising oil prices act as a damper on much-needed economic growth at a time when Western economies are still struggling to recover from a deep recession but they also have political implications.

The higher crude prices have resulted in spiking consumer gasoline prices, which have become a political issue in France as President Nicolas Sarkozy is polling neck-and-neck with Socialist rival Francois Hollande in the run-up to the April 22 first round of presidential elections.

Likewise in the United States, Republican opponents of U.S. President Barack Obama have sought to blame rising price on his administration's reluctance to open more of the country to domestic oil drilling and have denounced tapping the reserves as a political ploy aimed at helping his reelection chances.

Any move to release strategic reserve oil stocks would need to gain the approval of the IEA, which regulates the reserves. The agency said last week it hadn't fielded any requests to do so.

A White House spokesman said Wednesday the U.S. administration had yet to make a decision on whether to tap the strategic reserves, The Hill reported.

"We are coordinating with our partners around the globe to confront the global phenomenon that is the volatility in the energy markets right now. But I don't have any specific guidance for you on the Strategic Petroleum Reserve, other than to tell you something that we've said many times, which is that it's an option on the table," White House spokesman Josh Earnest said.

"But anybody who tries to convince you, in this government or any other government, frankly, that specific decisions have been made or actions had been proposed is not speaking accurately."

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Recommended Stories
Most Popular
1
Army receives first advanced CH-47F helicopter variant
2
U.S. gas prices should continue drop, AAA says
3
Hungary's MOL bullish about future
4
French Army flight tests latest Tiger attack helo
5
'No U.S. ban' on Iraqi oil, spokeswoman says
Trending News
Video
x
Feedback