Oil prices eased yesterday as US Energy Secretary Mr Bill Richardson said President Bill Clinton was near reaching a decision on releasing oil from the nation's strategic stocks to cut soaring crude prices.
Trade was volatile with prices earlier falling by nearly a dollar after US Democratic presidential nominee Mr Al Gore said he would recommend to the president several swaps of five million barrels from the Strategic Petroleum Reserve. Under the plan, the companies would restock the Strategic Petroleum Reserve later when prices are lower.
The move is an indication of mounting concern in the Gore campaign and the White House at the potential political fallout from high and rising energy prices, with just six weeks to go to the presidential election.
Republican presidential candidate Mr George W. Bush rapidly denounced Mr Gore's call to release reserves as a potential threat to national security and an election year political ploy.
Mr Larry Summers, the Treasury secretary, told President Clinton privately last week that he opposed any large-scale use of the reserves to ease the market pressures since it was intended for genuine supply emergencies. But yesterday he indicated he could support Mr Gore's more limited proposal.
Other administration officials back more aggressive use of the reserve. Mr Richardson is understood to have urged Mr Clinton last week to approve the release of 60 million barrels.
The move comes as governments of the G7 countries meet in Prague this weekend to consider a response to the crisis. Analysts had predicted a US move to reserve oil could lead to calls for a wider release of stocks in the G7 countries. But that seems unlikely.
Oil prices have continued to rise despite a decision by the Organisation of Petroleum Exporting Countries (OPEC) to lift headline production by another 800,000 barrels a day.
