Fact: the US Strategic Petroleum Reserve is not as strategic as it once was.

As US President Barack Obama tried moves closer to an unprecedented 2nd release of the US emergency Crude Oil stockpile in a bid to bring down near-record fuel prices, experts say dramatic logistical upheavals in the US Crude Oil market over the past year could now make such a move slower and very complicated.

Moving to tap the 4 giant Gulf Coast salt caverns that hold 700-M bbls of government-owned Crude Oil would likely drive Global Crude Oil futures South, delivering some relief at the pump for motorists and helping Mr. Obama in the November election if he can prevent gasoline from rising above $4.00 gal Nationwide, which is about where it is now.

Thursday, prices fell by as much as $3 bbl after Reuters reported that Britain was set to agree to release stockpiles together with the United States later this year. But the logistics of getting that Crude Oil to willing refiners are more complicated than ever before.

The reversal of a major Texas-to-Oklahoma pipeline will lower the distribution capacity of the SPR's largest cavern, according to the man who oversaw the US Crude Oil reserves during the Bush and Clinton administrations. A resurgence in domestic Crude Oil output and the potential closure of the East Coast's biggest refinery is curtailing demand for Crude Oil in the US.

The US shale Oil boom and rising imports of Canadian Oil sands crude have transformed the US energy landscape, with industry now scrambling to move a glut of Crude Oil from the center of the Country down to the US Gulf Coast, thus reversing historical trends that were the basis for the SPR's original planning.

The Nation's emergency Crude Oil stockpile, created by Congress in the mid-1970′s after the Arab Oil embargo, was designed to transport Crude Oil primarily via pipeline from the Gulf to refineries in the area and to buyers further North.

The fact that pipelines go South and not North is a major change, says Edward Morse, global head of commodities research at Citigroup (NYSE:C) and a former energy expert at the US State Department.

The Department of Energy says the SPR can distribute Crude Orude to 49 refineries with a capacity of more than 5-M BPD, about 33% the US total, and 5 marine terminals. It is designed to be capable of releasing Crude Oil within 2 weeks of an order, and to sustain a rate of 1-M BPD for as long as a 1.5 yrs, enough to meet 5% of US demand.

Today it can discharge Crude Oil at a maximum rate of 4.25-M BPD, just below its 4.4-M BPD design capacity, a department official said. The reduction is due to a damaged storage tank.

Industry analysts, as am I, are skeptical. Stay tuned...

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.