(Image Source: French Tribune )

 

BY JIM FLINK

ANCHOR CHRISTINA HARTMAN


Release the reserves.
It’s a rally cry heard in some corners of the world — a response to global fears of rising oil prices.
A coordinated worldwide release which was fueled this week by comments out of France.
Here’s LeMonde.. .

“The Elysee (is) said to be in contact with the British, the Americans to rebuild what has been done in Libya, but also producing countries.”

….and quoting a French government official.

‘The use of geo-strategic reserves can be justified because it is linked to geopolitical tension. It is a matter of weeks rather than days.’”

Oil prices have been rising for weeks, on Middle East tensions.
Enough to where many believe — it could severely dampen any economic recovery.
On CNBC , Jack Welch laid out his concerns.

“But the short-cycle businesses are being impacted by credit, and by gasolines prices...”

“It’s not taking off.  It’s relatively strong, but it’s not booming.”


No sooner had the mention been made of a reserves release — than prices began falling.
Bloomberg reporting....

“Futures declined as much as 2.5 percent after the government said supplies gained 7.1 million barrels to 353.4 million last week, the largest increase since July 2010.”

Each country controls its own release — but none wants to go it alone.
The Wall Street Journal notes — add in an election year cycle in both France and the United States, and solutions for a fix get more — flexible.
 

“Dipping into the salt caverns of Texas and Louisiana holding the reserves may be an attempt to resolve a conundrum that has rattled governments in recent months: how to crack down on the perceived threat of Iran's nuclear program without endangering a fragile economic recovery.”


But not everyone’s on board. Reuters reports — the head of the IEA — which coordinates reserve releases — doesn’t think there’s a enough of a supply disruption to warrant one. While that may be, as long as tensions continue, other options may be running short.

The Street says the clock is ticking to make sure economic recovery stays the course.

“...without coordinated action from the European Union, as many as 26 nations, there is little the U.S. can alone do to drive down global oil prices. The last time strategic reserves were tapped over a period of months in 2011, it worked to drive prices lower...”