Transatlantic cooperation on oil supplies discussed
An oil depot, or fuel farm, is seen from the air over Carson, Calif., Feb. 16, 2012. The French energy minister has raised the possibility of coordinated action to drive down global fuel prices.
Kai Ryssdal: The price of crude oil dipped today, thanks to a spot of transatlantic co-operation. Or at least the appearance thereof.
The French energy minister raised the possibility of coordinated action to drive down global fuel prices. He said France was talking with the U.S. and Britain about releasing some of their strategic petroleum reserves. The White House said, "This is an option but no decisions have been made."
From the European Desk in London, Marketplace's Stephen Beard reports.
Stephen Beard: The French and U.S. presidents have something in common: Both face elections this year; both are suffering from the high price of fuel.
Douglas Yates: French people are paying record prices at the pump and so this has become a political issue in the campaign.
Douglas Yates is professor of political science at the American University in Paris. But he says you don't have to be a political scientist to figure out why the French president's talking about releasing reserves.
Yates: Clearly Sarkozy is using this as a political gesture trying to buy votes with low oil prices.
But will it keep oil prices down even if the U.S., France and Britain do try to flood the market with their reserves? Kent Moors of Duquesne University in Pittsburgh thinks not.
Kent Moors: The ability of governments to influence the price of oil products is rather limited.
And that, says analyst Nick McGregor, is because everyone knows those reserves will have to be restocked fairly soon to cope with a real crisis, like Iran.
Nick McGregor: They could dent the reserves and do no more than calm the markets for a week or two.
Some analysts say the talk of releasing reserves is an attempt to scare off the speculators, to talk the market down. And for politicians facing re-election maybe it's worth a try. Opinion polls published today suggest that in the U.S., as in France, high gas prices now rival unemployment as the No. 1 economic concern.
In London, I'm Stephen Beard for Marketplace.