Obama eyeing soaring oil costs, voter discontent 

Rising oil costs are threatening political gains President Obama made in recent months, with each uptick in pump prices increasing the likelihood that already uncertain voters will start blaming the president for the drain on their pocketbooks.

The political protests roiling oil-rich countries throughout the Middle East are starting to affect American consumers and could soon overshadow other, more positive economic news, including a recent boost in job creation, on which Obama would rather focus.

Jeremy Mayer, an associate professor of public policy at George Mason University, said concerns about skyrocketing oil prices are driving Obama's hesitancy to speak out forcefully on uprisings in the Middle East and could blunt his efforts to talk up the economic recovery.

"If Saudi Arabia undergoes a revolution, you will see $5 a gallon gasoline," he said. "And at the end of the day, the president would be blamed for that. Suddenly, he really is Jimmy Carter."

Crude oil has risen to more than $104 a barrel -- its highest level since September 2008 -- reflecting panicked markets that could undercut the nascent economic recovery.

The runaway cost of fuel sours otherwise positive developments for the president, including an unemployment rate that finally dropped below 9 percent -- its lowest level in nearly two years -- as employers added 192,000 jobs in February.

But the average American is now paying nearly $3.50 a gallon for gas, and, according to a new Rasmussen poll, the vast majority of them -- 58 percent -- now believe they'll be paying $5 or more before July.

A handful of congressional Democrats are pressing Obama to tap U.S. oil reserves, citing the downward turn in gas prices when Presidents George H.W. Bush, Bill Clinton and George W. Bush did so.

White House press secretary Jay Carney said the president was monitoring oil prices "very closely," but wouldn't say how high prices would have to go before Obama would consider using the reserves, which are now at full capacity of 727 million barrels.

Administration officials argue that oil production has so far remained steady and that prices have not increased enough to warrant tapping the reserve, even with the violence in the Middle East, though Treasury Secretary Timothy Geithner told congressional leaders that "if necessary, those reserves could be mobilized."

Even oil industry officials, who have been at odds with the president over his proposed elimination of industry tax breaks, say it's too early to begin using the reserves.

"The high prices do threaten the momentum of recovery," said Rayola Dougher, a senior economic adviser at the American Petroleum Institute. "But [the reserves] should not be used as a tool to manipulate market prices."

Since the reserves were established in the early 1970s, they have been tapped only rarely, including after Hurricane Katrina and when tensions between Iraq and Kuwait caused oil prices to spike.


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