Despite its known purpose of dropping oil prices to 25 dollars a barrel and the temporary opening of the Strategic Petroleum Reserve –SPR- due to the damages caused by hurricane Katrina, the American Administration hopes to increase the capacity of this reserve by a third, thus reaching a billion barrels.
This measures shows, somehow, the worries regarding the ongoing rise in oil prices including a possible supply shortage due to the invasion of another Middle-East country : otherwise, buying such reserves at this moment would be ridiculous. In addition, considering the winter increase in the consumption of oil due to heating fuel demand, this measure will increase prices with the demand of an extra 200 million barrels that must be stored. Therefore, poor Americans will be the first affected ones. Worried about them, Venezuelan president Hugo Chávez has just made a proposal to sell them heating fuel oil for an unbeatable price, by eliminating intermediaries. The offer was later dismissed as "counterproductive" by a senior Bush administration official.(Picture: SPR storage location near Bâton Rouge in Louisiana)