The U.S. government does not plan to open the taps on its strategic petroleum reserve to combat higher gasoline prices, but President Barack Obama says that option remains should prices climb higher.
Some Democrats in Congress have urged Mr. Obama to release supplies from reserve, which is maintained by the Department of Energy, to calm markets worried about shortages and counter the recent oil price increase, which is taking some steam out of the North American recovery.
The national average of gasoline pump prices have risen 12 per cent in the past three weeks to $3.52 (U.S.) a gallon, the highest level since September, 2008. Canadian prices have climbed to tandem, to an average of $1.24 (Canadian) per litre.
In a news conference on Friday, Mr. Obama sought to reassure Americans that there is plenty of oil available to world markets. Other producers have stepped in to replace Libya's 1.5 million barrels a day of production, which has largely shut down because of the civil war in the country.
"Even if Libyan oil production was suspended for a significant amount of time because of the unrest there, we'd be able to fill that gap," Mr. Obama said.
He said there is no need to tap strategic reserves at the moment, but that the Energy Department is prepared to do so if necessary. Mr. Obama would not comment on what level prices would have to hit for the government to put additional supplies into the market.
U.S. storage tanks are brimming with oil, including record inventories in Cushing, Okla., where prices are set for West Texas intermediate.
The United States "will do what we need to do" in consultation with both producers and U.S. allies with crude reserves to make sure oil supplies "remain stable and that economic growth is going to continue," Mr. Obama said.
French oil giant Total SA said production at Libya's offshore al-Jurf field and the onshore Mabruk field has stopped, Bloomberg News reported Friday.
"We were one of the last producers because one of our fields is offshore, al-Jurf, and this was easier to operate," Total chief executive officer Christophe de Margerie said at a press conference in Paris. "Until last week we were producing from this field. Now it's over. We have repatriated everyone until the situation improves."
Almost all foreign oil workers have been evacuated from Libya, and analysts are now predicting that most of the country's oil production will be out of commission for months as turmoil rages and oil facilities are damaged.
After touching 2½-year highs earlier in the week, crude prices retreated as it became clear that Saudi Arabia, Kuwait and Abu Dhabi are increasing production, while fears of unrest spreading to Saudi Arabia eased. Analysts cited the earthquake and tsunami in Japan on Friday for further losses.
On the New York Mercantile Exchange, the benchmark West Texas intermediate crude fell $1.54 to $101.16 a barrel on Friday, after topping $105 earlier in the week. The leading international crude, Brent International, dropped $1.91 to $113.52 a barrel.Report Typo/Error