Under pressure, Bush stops adding to US petroleum reserve
But oil prices fail to react, climbing more than $2.50 a barrel Friday.
Faced with a veto-proof congressional mandate to stop adding oil to America's emergency reserve, President Bush is closing the spigot. But hopes that the move would lower oil prices have so far failed to materialize.
On Friday, oil closed over $126 a barrel, up more than $2.50. Gasoline prices also hit a record Friday – $3.79 a gallon, according to the AAA car club.
Energy analysts say the action won't have any impact on prices.
"It's a drop in the ocean," says Mike Fitzpatrick of MF Global, a commodities trading company in New York. "I guess every barrel helps at this point, but it probably won't even translate into a drop of a penny or two."
The president's decision means that some 66,000 barrels of oil per day that normally would be added to the 703 million-barrel Strategic Petroleum Reserve (SPR) in Texas and Louisiana will be sold instead to oil companies.
The issue of filling the SPR had become a political football in recent weeks. President Bush wanted to continue filling the SPR with another 24 million barrels of oil. However, the major presidential candidates – Sens. John McCain, Hillary Rodham Clinton, and Barack Obama – were all opposed. On Tuesday, Congress passed legislation mandating the president immediately halt adding to the oil reserve.