The UK and America could work together using reserve oil supplies to bring down fuel prices. Prime Minister David Cameron, who has been on a visit to the United States this week, said he and the President wanted to “smooth out” oil prices. Experts however, aren’t so sure releasing supplies would have much effect.
Reports suggested President Obama raised the idea of both the U.S. and Britain authorising a release of strategic oil reserves to increase supply in talks at the White House. However, his press secretary Jay Carney confirmed no deal had yet been reached.
According to experts there are about four billion barrels of oil in reserve worldwide, the equivalent of about 50 days worth of supply.
Nick McGregor, an oil analyst at Redmayne Bentley stockbrokers, told the BBC: “Even if they were to release significant amounts from reserves, it’s likely to have a temporary effect.
“The one thing they can’t do is change the pattern of supply and demand. If supply is tight, prices will rise. There’s a risk any gain from this would be temporary – weeks, potentially.Markets can absorb this very quickly.”