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JERSEY CITY, N.J. -- Consumers are expected to cheer more than just America's birthday next weekend. Gas prices are expected to drop to $3.40 per gallon or lower, according to a USA Today report.
The U.S. and the International Energy Association announced plans yesterday to sell 60 million barrels of oil from emergency reserves. Thirty million barrels of that figure will be released from the U.S. Strategic Petroleum Reserve (SPR).
U.S. gas prices have already been dropping after the national average peaked at $3.98 per gallon in May. The national average price dropped to $3.61 in the past week. The release of the oil reserves, with the chance for more oil reserves to be sold in the future, should drop the national average by another 20 cents or more by next weekend, the newspaper reported.
"This packs a psychological punch that's going to lower pump prices, for sure," oil analyst Jim Ritterbusch, of Ritterbusch & Associates, told USA Today. "This is a lift for both consumers and the economy."
"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," U.S. Energy Secretary Steven Chu said in a statement. "As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary."
Sen. Sherrod Brown, D-Ohio, said he has asked for the release of the strategic oil reserve for the past six months. "It's smart and will help the economy," he said.
However, some Republicans criticized the move. "The president is using a national security instrument to address domestic political problems," said House Speaker John Boehner, R-Ohio. "The SPR was created to mitigate sudden supply disruptions. The action threatens our ability to respond to a genuine national security crisis."