Business

US To Tap Crude Oil Reserve In ‘Unprecedented’ Move

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(credit: Joe Raedle/Newsmakers)

(credit: Joe Raedle/Newsmakers)

LOS ANGELES (CBS) — The U.S. could soon be swimming in crude oil after a decision to release up t0 60 million barrels from the nation’s Strategic Petroleum Reserve – but will it lure more Americans to get behind the wheel this summer?

While most experts attribute the White House move as a response to the U.S. and NATO military intervention in Libya that has disrupted Europe’s oil supply, industry analyst John Kilduff told KNX 1070 the decision to do so is nothing short of historical.

“This move is really unprecedented,” said Kilduff. “The U.S. has only dipped into the Strategic Petroleum Reserve in the aftermath of things like Hurricane Katrina or some of the other bigger storms that have hit the Gulf.”

“This is a truly rare event,” he added.

28 nations are participating in the release, with half of the yield to be contributed by the U.S.

Kilduff says the global cooperation in this oil release is a major factor in how the markets — and consumers — will ultimately react to the move.

“To see the various countries do it, if China also taps its reserves, this could go a long way,” he said. “This is exactly what the consumer needs to get back on its feet.”

Kilduff says that lower gas prices are the economic equivalent of a massive tax cut.

Oil prices dipped in midday trading to $90 a barrel for the first time in 4 months on news of the planned release.

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