Inquiring minds are investigating legislation that would sell US oil reserves in an attempt to bring down the price of gasoline. Can such a scheme possibly work?



Please consider US Reps File Bill To Tap SPR To Counter Oil Price Rise.



Several influential U.S. House Democrats have filed a bill that would require the government to tap the nation's Strategic Petroleum Reserve to counter rising oil prices.



Reps. Ed Markey, D-Mass., Chris Van Hollen, D-Md. and Peter Welch, D-Vt., said their legislation would direct the Department of Energy to sell 70 million barrels of more expensive light, sweet crude and replace it with cheaper heavy crude.



By mandating a release of oil into the market, legislators want to try and shake some speculators out of the market. Many lawmakers blame what they term " excessive" speculation in the market for skyrocketing crude prices, despite many economists citing the fundamentals of supply and demand as being the primary drivers.



The revenues brought in from the price differential in the swap would then go back into the SPR account to fill the reserve back up to its 727-million barrel capacity .

Constant Price Theories

Oil Production and Consumption

A Look at the Consumption Side

OECD Oil Consumption

Sweet vs. Sour



The WTI/WTS crude oil differentials for the first quarter of 2009 decreased to $0.94 per barrel compared to $4.67 per barrel for the first quarter of 2008.

Meaning of Strategic