The U.S. has the capacity to raise reserves to approximately one billion barrels but not with funding from Congress. The shortsighted thought that it was too great of an expense and putting oil in a reserve at the ridiculously high price of $30, $50 or $70 a barrel just didn't make economic sense. Does it make sense now? Congress needs to authorize the expansion of the reserve to combat what could be the greatest risk to oil supply in recent memory. With record supply now in the U.S., they could do it in a way that would barley nudge prices.
The U.S. is saying all options are on the table including military action when it comes to Libya. There is talk of establishing a No-Fly zone over Tripoli to keep the Mad Dog from bombing his own people or the oil fields.
In the mean time, tensions continue to build throughout the region in places like Bahrain, Algeria, Iran and most importantly Saudi Arabia. Even in Russia there is talk that the world could see a popular revolt, a small risk to the world's second and almost first, oil producer. In China they are shutting down Facebook as the "Jasmine Revolution" is gaining strength.
Will the reassuring words from the Saudis, the International energy Agency and the President keep us calm as we head into the weekend? Don't bet on it!
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.