U.S. to tap strategic oil reserve in rare move

The United States on Tuesday announced it would take the rare move of releasing oil from what's called the Strategic Petroleum Reserve, part of a coordinated effort with the world's great industrial powers to drive down soaring energy prices.

The White House said it’ll release 50 million barrels of oil in an agreement with China, India, South Korea, Japan and Britain.

Climbing energy prices are contributing to overall inflationary pressures that are hammering U.S. President Joe Biden's public approval ratings. The announced release of strategic reserves comes after a group of major oil exporters known as OPEC+ rebuffed Biden's repeated calls to pump more crude into global markets.

The OPEC+ states have shown no signs of a change of heart ahead of their December 2nd meeting. The UAE’s energy minister said Tuesday he does not see the logic of ramping up oil production at this time.

U.S. Senate Majority Leader Chuck Schumer welcomed the U.S. announcement, saying it offers – in his words - "temporary relief" for high gas prices, but he called for a long-term solution to eliminate dependence on fossil fuels and create a – quote - "robust green energy economy."

But analysts said the price impact stemming from the release of reserves will likely be short-lived after years of declining investments and a strong global recovery from the health crisis.

It certainly was short-lived on Tuesday. Crude futures initially fell after the announcement but rebounded strongly.