Rockefeller asks Obama to tap U.S. petroleum reserve

Reuters News
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Posted: Mar 21, 2011 2:52 PM
Rockefeller asks Obama to tap U.S. petroleum reserve

WASHINGTON (Reuters) - Senator Jay Rockefeller on Thursday became the third Democrat to ask President Barack Obama to consider tapping America's emergency oil supply to cool prices that have risen past $100 a barrel on the strife in Libya.

"I am asking President Obama to move to reduce the burden on Americans who are trying to drive to work or the grocery store, but who face sticker shock when they arrive at the gas station," Rockefeller wrote in a letter to Obama.

Rockefeller said a "limited draw-down" from the nation's 727-million-barrel Strategic Petroleum Reserve "can protect our national security by preventing or reducing the adverse impact of an oil shortage, and I support careful use of this important tool when world oil supplies are disrupted."

On Wednesday, U.S. Energy Secretary Steven Chu ruled out releasing oil from the reserve, saying ramped up oil production in Saudi Arabia should lower the crude price.

"That's going to mitigate the price increase," he told reporters on Wednesday. "We're hoping market forces will take care of this."

U.S. oil prices slipped from near 2-1/2-year highs on Thursday to $101.91 a barrel, down 32 cents, as traders took profits.

Fellow Democrat Jeff Bingaman, the chairman of the Senate Energy and Natural Resources Committee, called on the administration on Wednesday to be ready to release oil from the reserve, if conditions in Libya deteriorated further.

"While I do not think that high oil prices alone are a sufficient justification for tapping the SPR, I do believe that the announcement of an SPR sale would help to moderate escalating prices," Bingaman said on the Senate floor.

Senator Kirsten Gillibrand, another Democrat, also urged Obama to release oil from the reserve. "Our families are already struggling in this difficult economy and the last thing we need is rising gas prices."

Treasury Secretary Timothy Geithner said on Thursday the United States and other major economies could tap strategic reserves, if needed to keep oil prices from derailing a global recovery.

Geithner said high food and oil prices were causing hardships in many parts of the world. But he said Americans were feeling less impact.

"In the United States, rising gasoline prices have left consumers with less money to spend, but underlying inflation across all goods and services is modest," he said, testifying before the Senate Foreign Relations Committee.

(Graphic: http://r.reuters.com/xuv38r )

(Reporting by Timothy Gardner; Editing by Walter Bagley)