Trump has access to a little-used tool that could reduce oil prices

Susan Walsh / AP

• President Donald Trump has repeatedly expressed concerns about energy costs
• Rising gas prices could create a problem political for Republicans. Some badysts think Trump could turn to an urgent US oil reserve

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"REDUCE PRICES NOW!"

It was the message of President Donald Trump at OPEC last week adding that and they do little to help. "

This was only the latest in a series of tweets targeting the oil cartel on energy costs. And before the mid-term elections, where the rise gas prices could hurt his party, spills have raised questions about whether the president could turn to a federal oil stock called Strategic Petroleum Reserve

Standard Chartered badysts wrote in a note

The SPR, created as a result of the energy crisis of the 1970s, is primarily intended for According to the US Department of Energy, emergency releases may be allowed in case of war or natural disaster, but non-urgent releases may be allowed to respond to minor disruptions in supply or to increase federal revenue. "Shot 2018 07 11 at 13:14 PM" clbad = "img-responsive imported -news-img "src =" https://static1.businessinsider.com/image/5b463b1a15add92a008b4693-827/screen-shot-2018-07-11-at-11435-pm.png "/> UBS

Under the Energy Policy and Conservation Act, the President can decide whether a rejection of RSP is justifiable by a short supply potential While the price level itself even would probably not be covered by this standard, according to Jon Rigby, UBS badyst, supply outages could occur

"Venezuela and Iran are already subject to Sanctions. With onshore production and exports now limited by infrastructure, one of the main remaining market levers in the United States is its strategic oil reserve, "said Rigby.

But Concerns about global supplies are clear and growing: Crude oil has recovered in recent months as the US benchmark price is above $ 73 per barrel and gasoline pump prices hit peaks unequaled for four years

The political and economic turmoil weighing on the output of the main producers, including Venezuela and Libya, shows no signs of slowing down, and a strike by oil workers in Norway and a major outage in Canada is expected to result in market dropping in the coming months.

Perhaps most importantly, e State Department last month ordered most countries to cut off oil imports from Iran in November. This decision is part of Trump's decision earlier this year to withdraw the United States from the Iran deal, which lifted the sanctions against the country in exchange for restrictions on its program. nuclear weapon

help offset the fall in production. The unofficial leader of OPEC said that he has a reserve capacity of 2 million barrels a day, which involves a production of about 12 million barrels a day.

But some badysts question the feasibility. According to badysts at Bank of America Merrill Lynch, Saudi Arabia has never pumped more than 10.6 million barrels a day on average over a single month. "It seems the oil market has little confidence that Iranian volumes can be"

Although this may create a political headache for Republicans in November, it is unclear whether Trump would consider release of SPR The White House did not respond to an e-mail requesting a comment

Mr. Rigby stated that a release of SPR would initially lower prices. , just like the production of Saudi Arabia, this could have the opposite effect in the long run.

"We think that this would highlight the structural opacity of the market and the lack of options available to deal with it, "he added

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