With U.S. stockpiles declining and oil prices rising, prices at the pump seem to be in further trouble. Light sweet crude prices closed at $52.50 after dropping below $50 a share earlier in the week. Brent crude also closed higher, up 80 cents for the day.
President Bush spent much of his speech to the Hispanic Chamber of Commerce talking about oil and energy. He discussed his comprehensive energy plan, which includes the controversial measure of drilling in the Artic National Wildlife Refuge.
“The Department of Interior estimates that we could recover more than 10 billion barrels of oil from a small corner of ANWR that was reserved specifically for energy development. ANWR consists of 19 million acres of land. Technology now makes it possible to reach ANWR’s hydrocarbons by drilling on just 2,000 acres of the 19 million acres of land. That’s just one-tenth of 1 percent of ANWR’s total area. And we can reach ANWR’s oil deposits with almost no impact on land and local wildlife,” President Bush said.
“It’s important for our citizens to understand how much technology has changed. Developing this tiny section of ANWR could eventually yield up to a million barrels of oil a day. Do you realize that that’s more than half of what we import each day from Venezuela, for example? The more oil we can produce at home in environmentally sensitive ways, the less dependent we are on foreign sources of energy.”
The president went on to say he is pushing congress for legislation dealing with fuel crisis but it wouldn’t be solved overnight.
The U.S. Department of Energy reported U.S. stockpiles dropped by 1.8 million barrels. They were expecting an increase of 1.4 million barrels. U.S. also imported nearly 10 million barrels and the price of Brent Crude is being higher may be creating some problems as well.
Gasoline inventories also tanked dropping a whopping 1.5 million barrels versus the expected 275,000 barrels.
The primary hope now is that OPEC producers will continue to increase production. They increased it 500,000 bpd in during a March meeting in Iran. They announced yesterday they would increase it another 500,000 bpd in May and President Bush intends on pressuring Saudi to bring the production up more.
John Stith is a staff writer for Murdok covering technology and business.
