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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (133123)	5/15/2004 1:41:20 PM
From: quehubo	Read Replies (1) \| Respond to of 281500

Releasing the SPR wont create more gasoline. Release of the SPR would give refiners a tremendous boost if it lowered crude prices because it would lower input costs and not affect output prices much. Gasoline may be imported, but the USA has numerous regions that require different blends. The reason gasoline prices are high is in part because foreign refiners dont retool their refiners to meet the various blends we need. All the talk about the SPR ignores one thing. Oil prices today are affected by security of supply. Would the risk premium be higher for crude if we did not have a full SPR? Yes. When oil exports are interrupted, it will happen sooner or later, how do you value the oil coming from the spr? Maybe oil prices are only $75 a barrel instead of $150 a barrel. Also the larger the SPR the weaker the hand of Chavez or others that would try and blackmail us. OPEC has no more oil capacity that we need anyway. Refiners need light sweet oil for gasoline and OPEC has only the heavy sour crudes. If we chose to open the SPR as an economic tool, OPEC could easily say fine we are reducing output in an equal manner.