We might get some tangible help from the Europeans, after all. The Financial Times reports that European governments are preparing to release gasoline from their emergency stockpiles to help make up for the shortfall in supply caused by Hurricane Katrina. While no decision has yet been made, one source says the Europeans are waiting only for approval of their proposal by Washington:
Germany has assured the IEA that it would release stocks if asked to participate if needed. Germany holds the largest number of barrels of petrol in public storage. These extra barrels could hit the markets within one or two days. France, Spain and Italy also have large emergency gasoline reserves. However, should the gasoline be released, European countries are likely to seek an economic or political quid pro quo from Washington.
Of course, the petroleum market is global, and the Europeans have no more desire for high prices than we do, so they probably view such action as being in their interest. One point made by the FT that I hadn’t been aware of is that the U.S. only has reserve stocks of crude oil, while the Europeans actually store gasoline. If that is the case, it may be that release of gasoline by the Europeans could relieve gas prices more quickly than the U.S. government’s selling of crude oil from its emergency reserve.
Via Power Line News.