Obama looks into tapping oil reserves

NEW YORK — The Obama administration may consider tapping into U.S. oil reserves on concern that crude prices above $104 a barrel could damage the U.S. economic recovery, White House Chief of Staff William Daley said Sunday.

"We are trying to look at all the options," Daley said on NBC's "Meet the Press."

Daley didn't indicate when President Obama would decide whether to draw from the reserves, or what other options the president might consider.

Tapping into oil reserve "has been done on very rare occasions," Daley said. "There are a bunch of factors that have to be looked at, and it's not just the price."

The national average for regular gasoline was $3.38 a gallon on Feb. 28, compared with $2.70 a year earlier, according to the U.S. Energy Information Administration.

The increase reflects the rise in crude oil prices because of unrest across the Mideast and North Africa.

The revolt in Libya has blocked shipment of about 60 percent of its usual daily output of 6 million barrels a day, but little of that oil would have been destined for U.S. refineries.

"You have increasing (oil) demand worldwide as the global economy improves," Daley said. "There's no question this recovery is real and strong. The price of energy can have a serious impact. ... The uncertainty in the Middle East has caused tremendous increase in the last few weeks."

The 727 million-barrel U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned oil in the world.

The emergency reserve was established after the 1973-74 oil shortage, imposed by the Organization of Petroleum Exporting Countries because of U.S. support for Israel in the Yom Kippur War.

The reserve allows the government to respond to disruptions in commercial supplies and maintain a national defense fuel reserve.