President Joe Biden announced a historic oil reserve release Thursday, up to 180 million barrels, which so far, has helped lower the price of gasoline and crude oil, according to AAA on Tuesday. Photo by Michael Reynolds/UPI | License Photo
April 5 (UPI) -- Releasing millions of barrels of oil from the U.S. Strategic Petroleum Reserve, has helped quell the rising global oil price, according to a AAA news release Tuesday.
Releasing 1 million barrels per day over the next six months has so far helped send the price for a barrel of crude oil close to $100, AAA said in a news release.
The price per barrel of crude oil stood at $103.25 as of 12:30 p.m. EDT on Tuesday.
The average price at the pump for a gallon of regular grade gasoline was $4.176 at the same time on Tuesday.
That price is approximately six cents less than a week ago, 35 cents more than early March, and $1.31 more than the previous year.
On Thursday, President Joe Biden officially announced the country would tap into the Strategic Petroleum Reserve, releasing a total of 180 million barrels over the six-month period.
It is believed to be the largest-ever release from the strategic oil reserve.
Biden's announcement came as OPEC announced a plan to gradually ramp up production. The Organization of Petroleum Exporting Countries and its allies will increase their per day output by 400,000 on a monthly basis.
Lower gasoline demand is defying seasonal trends for a third straight week, perhaps due to higher pump prices and consumers altering their driving habits, according to AAA.
If demand continues to decline as gasoline stocks continue to build, the national average will likely continue to move lower.
"The upward push on oil prices caused by Russia's war in Ukraine is meeting stronger downward pressure from the planned SPR oil release and increased COVID fears in China," said AAA spokesperson Andrew Gross.
"And lower global oil prices are reflected in falling pump prices for consumers in the U.S."
The Strategic Petroleum Reserve is a government complex of four sites with deep underground storage caverns built inside salt domes along the Texas and Louisiana Gulf Coasts. It was first constructed in 1975 and is managed by the Department of Energy.
The current authorized storage capacity is 714 million barrels.