A Shell employee changes the price at a gas station in Menlo Park, Calif.… (Associated Press )
WASHINGTON -- The Obama administration announced Thursday that it planned to release 30 million barrels of oil from the Strategic Petroleum Reserve, as part of a coordinated international effort to drive down high crude prices and revive the flagging economic recovery in the world's most industrialized countries.
The decision sparked a plunge in crude oil prices in the U.S. and Europe. Oil futures were down $4.02 to $91.39 a barrel at about 10:45 a.m. PDT. The price was down as much as $5.72 a barrel in earlier trading on the New York Mercantile Exchange. The price was down as much as $5.72 a barrel in earlier trading on the New York Mercantile Exchange.
The oil will be released over the next 30 days, according to Energy Secretary Steven Chu, constituting half the 60 million barrels that the nations in the International Energy Agency plan to bring to market.
"We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery," Chu said. "As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary."
FOR THE RECORD: Oil prices:
An earlier online version of this article stated that crude oil prices had stayed at or above $100 a barrel since February. Prices have been below $100 a barrel recently, and crude oil closed at $95.41 on Wednesday.
Crude oil prices, which peaked at $113.93 a barrel on April 29, have slid as the economy has shown more signs of weakness.
Fighting in Libya has caused a loss of about 1.5 million barrels of oil per day from global markets, according to the Energy Department. Despite the absence of Libyan oil, there is no shortage of oil in the world. But nervousness about unrest spreading to other Arab oil producers, speculative investment in the oil markets and the revival of the Chinese and Indian economies have pushed crude prices to painful levels.
The decision to release the oil comes as the United States, by far the world's largest oil consumer, enters its peak driving season during the vacation months of July and August with gasoline prices hovering stubbornly at far higher levels than before the Libyan crisis began.
"This is about addressing supply disruptions and their potential impact on global economic growth," said a senior administration official in a conference call Thursday morning.