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Bill's OK may halt delivery of reserve oil

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Globe Wire Services / May 13, 2008
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Sponsors of a measure to halt shipments of oil to the US Strategic Petroleum Reserve - offered as a way to help bring down record gasoline prices - say they are confident the bill will pass.

The proposal was the lone measure endorsed in both Senate Republican and Democratic gasoline price plans.

House and Senate plans set for a vote today would halt deliveries to the reserve until December unless oil falls to $75 a barrel for more than 90 days.

"Everyone expects it to pass," said Bill Wicker, a spokesman for New Mexico Democrat Jeff Bingaman, speaking of Senate prospects. "Oil got up to $125 per barrel, and it no longer made sense," Wicker said of Republicans decision to support the measure.

Oil in New York rose to a record $125.96 per barrel on Friday, from $116.50 a week earlier.

The 8.3 percent gain is the largest in more than a year, and it moved legislators to come up with plans to try to bring down the price of gasoline.

Crude oil for June delivery hit a record $126.40 a barrel yesterday, before falling to $124.23 a barrel on the New York Mercantile Exchange.

"Suspending the SPR fill will keep the government from competing for oil in the marketplace and driving up fuel costs for American motorists and truckers during the summer driving season," Bingaman said in a statement.

Sixteen Republican senators, led by Kay Bailey Hutchison, of Texas, wrote to Bush last month, asking him to halt shipments to the reserve.

The White House yesterday rejected calls from Congress to stop adding oil to the reserve and divert those deliveries to the market and said it won't sell crude oil from the reserve to help boost available oil supplies and lower prices.

"The president, as the person responsible for the safety and security of the American people, would resist any calls to start selling off Strategic Petroleum Reserve oil, and we don't think it would have that big of an impact on prices," White House press secretary Dana Perino told reporters.

"It's like the fire extinguisher in case of an emergency," said Perino about the oil reserve.

In Massachusetts, gasoline prices surged to another record high, 12 cents more than last week's mark.

A statewide survey yesterday by AAA Southern New England found an average price of $3.68 per gallon for self-serve, regular unleaded. That compares with $3.56 a week earlier and marks the fifth consecutive week of higher prices.

The state remains 3 cents below the national average of $3.71. A year ago, the Massachusetts average stood at $2.95.

Until the recent spike in prices, the state's record price was $3.23 per gallon, set in the aftermath of Hurricane Katrina in 2005.

Meanwhile yesterday, the president said he will raise concerns about high oil prices when he visits with Saudi Arabia's King Abdullah this week.

"The demand for oil is so high relative to supply these days that there's just not a lot of excess capacity. And of course I'll bring it up to him," Bush said in a CBS radio interview. "The price is even higher," Bush said, than when he made his last visit to Saudi Arabia in January.


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