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US taps oil reserves as Opec chief tries to calm markets

JAKARTA - The US Energy Department has tapped the United States’ strategic petroleum reserves to release 2.5 million barrels of oil per day into the US market, Opec’s president said yesterday as he tried to reassure the overheated crude market.

Purnomo Yusgiantoro said he hoped the US decision, which follows a spate of hurricane attacks in the Gulf of Mexico that has disrupted oil supply flow, would prompt other Opec and non-cartel members to follow suit.

He added that oil production in Nigeria had not been affected by a recent outbreak of violence, which has alarmed the market and kept crude oil futures prices hovering around the 50 dollar per barrel mark.

“I just received a letter from the US informing us that they have released 2.5 million barrels per day from their strategic petroleum reserves,” Yusgiantoro told reporters.

“I hope other Opec and non-Opec countries can follow the US step to curb the rise in oil prices,” said Yusgiantoro.

“We have communicated with Nigeria and so far the situation is normal so there is no problem with production,” he said.

Yusgiantoro, who is also Indonesia’s energy minister, said Opec planned to raise its 2005 oil spare capacity to between 3.0 and 4.0 million barrels per day (bpd) from the current standby of 1.0 to 1.5 million due to the “difficult” market situation. Group members including Iraq had already been producing four million bpd above their previous quota.