US Taps Strategic Petroleum Reserve
The government announced it would tap the nation’s Strategic Petroleum Reserve to make up for shortages caused by Hurricane Katrina, but analysts believe it will do little to lower gasoline prices. Industry observers think the price of gas may become much more expensive, instead, because devastation delivered by Katrina is so widespread and involves so much of the petroleum industry’s infrastructure.
“I wouldn’t rule out $4 a gallon,” said Marshall Steeves, an energy analyst with Refco Group. “There is a definite possibility of sporadic and regional shortages.”
The Strategic Petroleum Reserve holds more than 700 million barrels of crude in Louisiana and Texas. President Bush said the Energy Department would work with refiners but offered no details.
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