WASHINGTON — Responding to congressional pressure, the Bush administration on Friday said it is suspending oil deliveries into the government’s Strategic Petroleum Reserve for the remainder of the year.
The move came days after Congress passed legislation requiring President Bush to temporarily halt shipments into the reserve in hopes of lowering gasoline prices. The president is expected to sign the bill.
The decision came as Bush, visiting Saudi Arabia, sought to get the Saudis to pump more oil. Saudi Arabia announced it decided a week ago to increase production by 300,000 barrels a day in response to customer requests, although it also told U.S. officials it believes world supplies are sufficient to meet demand.
The Energy Department said it will not sign six-month contracts scheduled to have begun starting July 1, for the acceptance of 76,000 barrels of oil a day. The department also plans to defer deliveries under existing contracts once the legislation passed by Congress late Wednesday becomes law.
Bush had opposed halting the shipments, arguing that such a relatively small amount of oil would not influence prices. The reserve, a system of salt caverns on the Louisiana and Texas Gulf coast, is 97 percent full, holding 701 million barrels of crude.
The stockpile, currently sufficient to cover two months of oil imports, is kept as a cushion in case of a major disruption of oil supplies.
Crude oil prices were about $126 a barrel and held firm Friday on the New York Mercantile Exchange, despite the U.S. and Saudi announcements.
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