* Saudi oilmin said would take steps to moderate price
* Analyst: using SPR is uncertain way to manage fuel price
* White House says all options still on table with SPR
By Timothy Gardner
WASHINGTON, Sept 16 The White House embraced
over the weekend recent comments by Saudi Arabia's energy
minister some market watchers had taken as a signal that
consumer nations need not release emergency petroleum reserves
to calm oil prices.
Saudi Arabia's Oil Minister Ali al-Naimi said in a statement
on Sept. 10 that the world's largest crude exporter was
concerned about high oil prices, would take steps to moderate
them, and would meet any additional demand from its customers.
The kingdom would continue to work with other Gulf
Cooperation Council countries and with OPEC to defend the
stability of the oil market, Naimi said.
Stubbornly high U.S. oil prices, which on Friday hit more
than $100 a barrel, the loftiest since May 4, have led industry
watchers to guess whether President Barack Obama will tap the
Strategic Petroleum Reserve (SPR) ahead of the Nov. 6 election.
The White House reiterated it was keeping all options on the
table to calm prices, but also applauded Naimi's comments.
"We ... welcome Saudi Arabia's continued commitment to take
all necessary steps to ensure the market is well supplied and to
help moderate prices," a White House official said in an email
over the weekend.
Saudi Arabia pumped oil at about 9.8 million barrels per day
in July and August, just off multi-decade highs of 10 million
bpd hit earlier in the year. It has said it can easily increase
output to more than 12 million bpd if needed.
The White House's embracing of Naimi's comments comes after
some analysts said the SPR is a tricky tool to manage fuel
prices in the short term, even though it could help prevent a
spike over the long term.
Tapping the reserve can make traders and other market
participants skeptical that oil producers are well equipped to
satisfy world demand, said Blake Clayton, an energy fellow at
the Council on Foreign Relations in New York.
"A release can make markets more anxious, not less, about
future conditions in the oil market," Clayton wrote in a recent
paper about Obama's tapping of the SPR last year when oil
exports plummeted from Libya, which was undergoing civil war.
"Market expectations about higher prices tomorrow can spark
higher prices today," he wrote.
Global oil prices rose to nearly $117 a barrel on Friday on
persistent worries about a potential Israeli attack on Iran,
anti-U.S. protests over a film demonstrators consider
blasphemous to Islam, and a third stimulus from the U.S. central
bank. That price is close to the $120 level some have said would
push the Obama administration to tap reserves.
But if the administration decides to take such a step before
the U.S. election, the timing might be hard to get right.
On the day the United States and the International Energy
Agency released 60 million barrels of emergency oil last year,
crude prices fell. Within two weeks they regained the losses and
started climbing again.