‘1 equation with 10 unknowns’: Local economist reacts to Biden’s release of 15 million barrels of oil
PROVIDENCE, R.I. (WLNE) — President Joe Biden announced Wednesday the release of 15 million barrels of oil from the U.S. strategic reserve as part of a response to recent production cuts announced by OPEC+ nations.
This announcement comes about three weeks before midterm elections, and in the midst of gas prices beginning to creep back up again, after a steady decline.
University of Rhode Island economics professor Len Lardaro said at face value this seems like a great thing — but it’s just one small factor that goes into the price of gas at the pump.
“Right now, it’s like one equation with like 10 unknowns,” Lardaro said.
One of the major influences on prices: supply and demand of oil worldwide.
“It will at least moderate them [prices] from where they would have gone. So again, the two wildcards are how bad the winter will be, but also when we could see a slowdown — like the housing market and other goods,” Lardaro said.
The reserve is in Texas and Louisiana holds more than 700 million barrels of oil. It was created in the 1970’s after the Arab Oil Embargo, to give the United States a supply to be used in case of emergencies.
To read more about the reserve click here.