‘Bandaging an Open Wound’: Analysts Expect Short-Term Gas Price Relief from Oil Release | Local

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While the release of oil from the Strategic Petroleum Reserve may offer some relief to drivers at the gas pump, it likely won’t have a “huge impact on prices,” according to an AAA spokesperson.

On Thursday, President Joe Biden announced the release of about 1 million barrels of oil a day for about six months from reserves, totaling about 180 million barrels.

The first barrels should hit the market in May.

“On the upside, it can increase supply, which in theory can lower the price,” said Daniel Armbruster, AAA’s senior public affairs specialist. “It may be minimal, but I think at this point every little bit helps for many drivers.”

Patrick DeHaan, head of oil analysis at GasBuddy, agreed, adding that Biden’s move “could definitely help prices in the near term.”

The national average for gas prices is around $4.22 per gallon, according to the AAA’s website. In Texas, the average is around $3.83.

In Longview, the average price for a gallon of Friday unleaded was about $3.83 and about $3.77 in Tyler, AAA reported.

If all remains consistent, the national oil price could drop 10 to 35 cents per gallon, DeHaan said.

There are many factors that go into the price of oil, and tapping into reserves is just one of them, he said. He added that an escalation between Russia and Ukraine or other events could offset the possible drop in prices.

“There could be a turn of events that would lift oil prices even after the announcement, and that could offset the relief we’re talking about here,” DeHaan said.

With the war in Ukraine and sanctions put in place by the United States, gas prices rose significantly between February and March, DeHaan said.

“The response of the United States in terms of sanctions against the Russian energy sector and financial sector has made it more difficult to get this oil out of Russia,” he said. “Because of this, the price of oil has risen dramatically in a very short time, which has pushed gasoline prices up significantly.”

DeHaan said there is a whole list of pros and cons when it comes to extracting oil from reserves – one pro being the potential reduction in gas costs and one cons being a decrease in reserves for any future crisis, he said.

Biden’s decision will leave the reserve with around 388 million barrels.

“It would be the least oil in reserves since the 1980s and could certainly leave us more vulnerable to price shocks down the road if there were another event that altered the flow of oil around the world,” he said. -he declares.

Longview’s Jonathan Merryman was pumping gas Friday at Murphy Express on East Loop 281.

“It’s been crazy the last few months. Gasoline prices have gone up, but now it looks like they’re finally coming down, and in fact it’s the cheapest gas I’ve seen in a 40 mile radius. 50 miles because I’m going back and forth in Arkansas,” he said.

Merryman said he wasn’t sure releasing oil from the national reserve was a good idea.

“I’m actually in the military, so I pay attention to a lot of things the president says. We keep these (barrels) as reserves for when we really need them,” he said. “I know gas prices are a bit higher than normal right now, but I really don’t think we need those barrels yet. I think we should save them for when we need them. , which is currently not the case.

Adriunna Hawkins, also from Longview, said she was surprised at the cost of refueling after collecting her car in December.

“When I finally had to put gas in my car, I was like, ‘Wow, it takes $50 to fill up the gas?’ she says.

Hawkins added that she thinks lowering prices by releasing oil from the reserve “would work”.

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