US emergency oil reserve slips to 40-yr low

New York: The US’s emergency oil stockpile has plunged to a 40-year low as the shrinking Strategic Petroleum Reserve is limiting Washington’s ability to shield consumers from the fallout of Saudi Arabia’s aggressive supply cuts, according to Goldman Sachs.

“At this point, US energy policy has fewer bullets left. It has less levers left in its policy toolkit,” CNN quoted Daan Struyven, head of oil research at Goldman Sachs, as saying. That’s one reason Goldman Sachs expects oil prices to stay high, averaging $ 100 a barrel this time next year.

Triple-digit oil would boost already-high prices at the pump, worsening inflation and potentially influencing the 2024 race for the White House.

To cushion the blow from the war in Ukraine, President Joe Biden’s administration has released vast amounts of oil from the SPR, the underground series of storage tanks along the Gulf Coast that contains emergency oil.

Industry veterans say that strategy helped mitigate the hit to consumers as gasoline prices plunged after hitting $5.02 a gallon in June 2022, CNN reported. But the SPR, which acts as a rainy-day fund that presidents can tap during times of war or natural disaster, is down by about 270 million barrels over the past two years to the lowest level since August 1983.