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Tags: France | US | Oil | Prices

Source: France, US Discuss Rising Oil Prices, Weigh All Options

Friday, 17 August 2012 07:18 AM EDT

France and the United States are in contact on recent oil price rises and are studying all options, an official at the offices of President Francois Hollande said on Friday when asked about a possible release of strategic oil reserves.

"We are consulting our American partners on all issues, including containment of oil prices. All options are being studied," the official, speaking on condition of anonymity, told Reuters.

U.S. officials are monitoring the oil market to judge in coming weeks whether a release of oil reserves might be needed to curb the recent rise in prices, a source with knowledge of the situation said on Thursday.

A release of France's strategic oil reserves would be a change of tack for the French president, whose energy adviser during the presidential campaign said Hollande would oppose a drawdown of emergency inventories because it would leave France vulnerable in case of a major supply crisis.

Hollande had proposed instead to freeze retail fuel price increases for three months, but the lower oil prices he found when he took office in May meant no action was immediately taken.

However, the recent fuel price rise, coming at a time when the French economy is struggling to avoid a recession, forced Finance Minister Pierre Moscovici to announce on the radio that the government would unveil unspecified measures at the end of August if prices continued to swell.

Brent crude oil prices have risen by more than a third in less than two months on worries that conflict over Iran's disputed nuclear program could lead to war, disrupting oil supplies from the Middle East.

With the oil price rally coming at a time when world economic growth is slowing, dampening demand for fuel, and with oil supplies ample, many investors feel the recent price rises have been overdone.

But the fall in the euro against the dollar in the last few months means the pain is particularly acute in the euro zone, with oil prices in euro terms reaching levels unseen since their 2008 peak.

In May, the International Energy Agency (IEA), the West's energy adviser responsible for coordinating reserves, was put on standby for action. No one at the Paris-based agency was immediately available for comment on Friday.

© 2023 Thomson/Reuters. All rights reserved.

Friday, 17 August 2012 07:18 AM
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