Total CEO: Tapping oil reserve may drive up prices

By Steve Hargreaves, senior writer


HOUSTON (CNNMoney) -- The chief executive of French oil company Total said tapping the U.S. Strategic Petroleum Reserve is unnecessary, would signal fear and ultimately could drive energy prices higher.

Tapping the reserve "will send a message we are scared, and it could mean an increase in prices, not a decrease," Christophe de Margerie, said at IHS CERA's oil industry conference Tuesday. Total is the world's fifth-largest publicly-held oil company by revenue.

"It's to be left for a time when we are really confronted with a shortage of oil, which is not the case," said de Margerie.

He said Saudi Arabia and other countries can pump more than enough oil to make up for Libya's production of 1.6 million barrels a day, much of which is thought to be offline amid the country's ever-intensifying civil war.

The Saudis have indicated they will redirect oil to make up for lost Libyan production, but no formal OPEC production increase has been announced.

Many prominent lawmakers have called on President Obama to tap the strategic Petroleum Reserve in the hopes that it may bring down surging oil prices. U.S. crude prices have jumped 10% in the last month.

Part of that increase is due to the unrest in Libya, but much of it is due to the fear that the unrest could spread to other parts of the Middle East, particularly Saudi Arabia.

Gasoline prices have surged 15 cents a gallon over the last two weeks. Many economists say gasoline prices are reaching a level where they threaten the country's fragile economic recovery.

The Obama administration has not said whether it will tap the reserve which holds 727 million barrels of oil in underground salt domes in Texas and Louisiana.

That's enough to cover U.S. oil imports for about 90 days. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,778.15 421.28 2.43%
Nasdaq 4,748.40 104.09 2.24%
S&P 500 2,061.23 48.34 2.40%
Treasuries 2.20 0.06 2.61%
Data as of 7:08pm ET
Company Price Change % Change
Bank of America Corp... 17.53 0.27 1.56%
Apple Inc 112.65 3.24 2.96%
Oracle Corp 45.35 4.19 10.18%
General Electric Co 25.14 0.71 2.91%
Microsoft Corp 47.52 1.78 3.89%
Data as of 4:03pm ET

Sections

Susan Wojcicki said the rate of new moms leaving Google fell by 50% after the company began offering 18 weeks of paid maternity leave. More

The shale boom has been a blessing to Texas, but tumbling oil prices are casting a shadow over the state. More

Susan Wojcicki said the rate of new moms leaving Google fell by 50% after the company began offering 18 weeks of paid maternity leave. More

With two recent IPOs and a digitally-inclined audience of entrepreneurs, non-traditional financing could finally get its big break. More

Payday lenders are spending millions of dollars in Washington in an attempt to get powerful politicians on their side as a government crackdown on the industry heats up. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.