WASHINGTON (Pakistan Point News / Sputnik - 24th November, 2021) A one time release from the US Strategic Petroleum Reserve (SPR) will not have an effect on long-term oil prices, but increasing the number of oil rigs will, Branko Terzic, a former commissioner at the US Federal Energy Regulatory Commission, told Sputnik.
Earlier on Tuesday, President Joe Biden announced the release of 50 million barrels of oil from the SPR in concert with other major energy consuming nations, including China, India, Japan, South Korea and the United Kingdom, to stem surging oil prices.
"A one time release does not affect long-term prices, which are based on balancing long-term supply and long-term demand," Terzic said. "For example, increases in the number of US drilling rigs would factor into long-term price estimates since wells supply oil for years."
Asked how he sees the potential change in oil prices in the upcoming weeks and months, Terzic said the oil price "should increase per design of OPEC plus Russia's future production agreements" if the global economy continues to grow at the current rate.
The national average gas price dropped slightly on Tuesday from $3.409 to $3.403 per gallon, while the total monthly decrease reached almost 40 cents, according to the American automobile Association. However, prices increased by more than $1 as compared to 2020.
Prices at the pump have increased sharply over the past year under the Biden administration's policy to gradually get away from fossil fuels and seek alternative sources of energy and have hit highs above $4.70 per gallon in California on Tuesday.
