By Tom Doggett Thu May 15, 11:06 AM ET
WASHINGTON (Reuters) – The White House on Thursday dropped its resistance to putting a halt on filling the Strategic Petroleum Reserve, saying that President George W. Bush will not veto a final bill from Congress that suspends oil deliveries while crude prices are very high.
The Senate late on Wednesday approved a measure previously cleared by the House of Representatives that would stop deliveries of crude to the U.S. emergency petroleum stockpile until the price of oil fell below $75 a barrel.
U.S. oil was trading around $126 a barrel on Thursday on the New York Mercantile Exchange.
The Bush administration had rejected repeated calls from lawmakers over the last few months to stop putting oil into the stockpile. The White House said the United States needed a bigger reserve to offset any major supply disruptions, such as those caused by hurricanes or terrorist attacks.
Supporters of the legislation said the average 70,000 barrels of oil a day going into the reserve should instead be put into the market to help lower record oil and gasoline prices, possibly pushing pump costs down by as much as 25 cents a gallon.
“The gas prices are killing us,” Democratic Sen. Richard Durbin said this week during debate on the bill. “We can’t justify continuing to take oil off the market.”
However, many energy experts believe the extra 70,000 barrels would be just a drop in the bucket of the 20.5 million barrels of oil the United States consumes each day, and would have little impact on prices.
“It is such a small percentage of overall demand it won’t have much of an effect right now,” said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.
The emergency stockpile, created by Congress after the 1973-74 Arab oil embargo, holds about 703 million barrels of crude at four underground storage sites in Texas and Louisiana.