Using the US Strategic Petroleum reserves

An article in the Economist (March 24, 2012) discusses a plan to use the US Strategic Petroluem Reserves to dampen US oil prices. The reserve was set up to provide an inventory buffer against emergencies and has been used after Persian Gulf wars and Hurrican Katrina. But the mere announcment of a plan to use the reserve usually gets prices declining – however, they soon rise back up to their earlier levels. What is the best use of this safety stock to stablize oil prices ? How should natural supply-demand levels be separated from emergencies in the rational use of this reserve ? Is it reasonable to use the threat of release of stocks to influence oil price direction and manage its impact on the economy ?

Advertisements

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s