Republican pessimistic U.S. will release crude oil

30 Dec 2002 19:36

By Chris Baltimore

WASHINGTON, Dec 30 (Reuters) - A senior House Republican on Monday expressed pessimism that the Bush Administration will release crude oil from the nation's Strategic Petroleum Reserve to counter dwindling supplies from strike-ridden Venezuela, a vital U.S. supplier.

Republican Rep. Billy Tauzin of Louisiana, chairman of the House Energy and Commerce Committee, asked the Bush Administration last week to release oil from the stockpile in order to keep refineries well stocked.

"We haven't heard anything official yet. But we're not very optimistic given the administration's concerns about events in the Middle East," said Ken Johnson, Tauzin's spokesman, about the status of that request.

"We continue to be concerned that events in Venezuela will have a chilling effect on consumers in the United States," Johnson said.

Crude oil prices on Monday hit a two-year high of $33.65 per barrel as traders bet on a U.S. attack against Iraq early next year, but later fell on indications from OPEC that it will fill supply gaps caused by events in Venezuela and Iraq.

The U.S. Energy Department, which would act on Tauzin's request, has repeatedly said it has no plans to release oil from the reserve because it is not necessary.

The department was not available for comment on Monday.

The department has allowed energy firms to defer delivering 7.4 million barrel of oil to the reserve through January in order keep more crude in the U.S. market and counter a virtual cutoff in Venezuelan oil exports due to a workers strike.

The strike has closed most oil production and refinery operations in the world's fifth-biggest exporter.

Venezuelan oil workers are trying to pressure the country's president, Hugo Chavez, into early elections or to resign.

While the U.S. government has been willing to delay deliveries to the stockpile, it has refused to loan energy companies reserve oil to keep supplies steady to their refineries.

The department spokesman said there was no oil supply emergency to warrant tapping the reserve.