US leads push for lower oil prices
Over the weekend, G-7 members praised US move to tap emergency reserves, saying they may follow suit.
The world's oil-consuming nations are getting serious in their efforts to bring down the price of oil.
In a message to OPEC and oil speculators, the US and other major oil users are turning to their oil reserves - which are designed for emergency use.
The effort carries a high degree of risk. Oil traders may snap up the additional crude oil on the world's futures markets or oil-producing nations might reduce their output. But it might also provide consumers with their first respite in months.
The intervention in the oil market, which started Friday when President Clinton opened up the spigots on the Strategic Petroleum Reserve (SPR), gathered momentum over the weekend as other industrialized nations praised the US move and said they may now tap their own country's emergency oil reserves.
Oil experts believe the effort will, at the very least, have a temporary effect of lowering prices - perhaps as much as 10 percent. However, the additional oil is not likely to make any significant difference in increasing the amount of heating oil or diesel this winter, since US refineries are already operating at close to capacity.
"Releasing a ton of oil is not going to result in a ton of home-heating oil or gasoline," says John Huber, a vice president at the Petroleum Marketers Association in Washington. "It's really not going to affect actual inventory levels at all."
A drop in the barrel
Although the White House move to release 30 million barrels over the next 30 days may not have any lasting impact on prices, it will help stifle political criticism. In recent weeks, politicians in the Northeast have been warning the president that heating-oil inventories are dangerously low.