Top expert warns against using strategic oil reserves

An influential energy expert is warning against tapping the Strategic Petroleum Reserve (SPR) in response to oil prices that soared above $100 per barrel earlier this week.

Several House Democrats on Thursday asked President Obama to mull releasing some oil from the 727 million-barrel reserve.

But Daniel Yergin — author of the Pulitzer Prize-winning The Prize and head of Cambridge Energy Research Associates — tells The Wall Street Journal that the SPR shouldn’t be used as a way to lower prices.

“That is there to deal with a disruption. Basically I think it is unwise for the U.S. government to get in the business of price controls,” he said.

Oil prices this week jumped above $100, their highest levels in over two years, amid unrest in Libya. But they have since retreated somewhat — oil is currently trading in the $97 range on NYMEX.

Yergin said that current prices are rooted in factors beyond the unrest that has stymied production in Libya, the world’s 17th-largest oil producer. “The price is reflecting more than Libya, it is reflecting the question of what happens next,” he said.

Yergin — who noted there is spare capacity to deal with the drop in Libyan production — said the trajectory of prices in coming weeks depends on “what happens elsewhere in the Middle East” and what events may come from “left field.”