By Ben Geman - 02/24/11 05:48 PM EST
“However, one tool that the United States has at its disposal to protect against the threat of supply disruptions and related speculation in the oil markets is the Strategic Petroleum Reserve (SPR). As we approach the summer driving season, we must carefully consider all immediate options in order to prevent the runaway increase in prices that we saw in the summer of 2008. We therefore urge you to consider leveraging the SPR to respond to these supply disruptions and combat the rapid price escalations resulting from rampant speculation in the oil markets.”
The letter states that releasing even a small fraction of the reserve’s oil could have a “significant impact on speculation in the marketplace and on prices.”
The 727 million-barrel reserve is located in salt caverns along the Gulf of Mexico.
Oil prices soared to records of $145 per barrel in the summer of 2008, and average gasoline prices reached records above $4.11 per gallon in July of that year. Gasoline prices have climbed of late and currently average $3.23 per gallon, according to AAA.