OPEC asks U.S. to tap its reserve

OPEC’s president said yesterday the United States should tap into its emergency petroleum reserve to help lower oil prices.

“We have asked [the United States] to use their oil reserves to help cool down the prices,” Purnomo Yusgiantoro, the head of the Organization of Petroleum Exporting Countries and Indonesia’s mines and energy minister, said in Jakarta, Indonesia.

President Bush has repeatedly said the reserve would only be touched in the event of a major supply disruption, though Sen. John Kerry of Massachusetts, his Democratic rival, has chided Mr. Bush for not doing more to help consumers.

Trent Duffy, White House spokesman, dismissed Mr. Purnomo’s statement. He said there had been no recent discussions between the United States and OPEC on the reserve and that, in any event, the president would not open the spigot on the reserve as a matter of political expediency.

“The president has made it clear that the reserve is for emergencies and severe supply disruption only, not for price manipulation or political reasons,” Mr. Duffy said.

Mr. Kerry wants to suspend filling the reserve until oil prices decline.

“John Kerry has been urging George Bush to stop filling the Strategic Petroleum Reserve to provide some real short-term relief to American consumers … ,” said Sen. John Edwards of North Carolina, Mr. Kerry’s running mate.

The reserve, stored in salt caverns along the Texas and Louisiana coastline, is the largest stockpile of government-owned emergency crude oil in the world. It was established after OPEC’s 1973-74 oil embargo to counter commercial oil supply disruptions that might threaten the U.S. economy.

The reserve currently holds 669.5 million barrels; maximum capacity is 727 million barrels, according to the Energy Department. The administration plans to add 1.6 million barrels to the reserve this month and 1.8 million next month.

U.S. crude oil production and imports combined were about 15.3 million barrels a day last year, according to the Energy Department.

Mr. Bush is lending 5.4 million barrels of crude oil from the reserve to five companies to offset Gulf Of Mexico supplies disrupted by Hurricane Ivan.

The last major drawdown occurred in response to low commercial heating-oil stocks in 2000. President Clinton released 30 million barrels of oil from the reserve to boost supplies and lower prices, a move attacked by then-Texas Gov. Bush as an effort help Vice President Al Gore in his run for the White House.

OPEC’s president wants reserves released into the market out of concern that high prices will hurt the global economy and ultimately lower demand for oil.

Historically high prices have been driven by high demand, limited supplies and concerns over supply disruptions. Political unrest in Nigeria, hurricanes in North America, the legal woes of Russia’s Yukos, continuing violence in Iraq and worries over cargo security all have contributed to speculation and higher prices.

The cartel’s largest member, Saudi Arabia, yesterday said there already is enough crude on the market but that releasing petroleum from the strategic reserve might have a small psychological effect on markets.

“There is plenty of oil. Other factors are driving prices up,” said Nail Al-Jubeir, spokesman for the Saudi Arabian Embassy in Washington.

The kingdom has offered to increase production, but with little effect on markets.

Mr. Al-Jubeir said the decision on the emergency oil reserves is a domestic issue for the United States.

Crude oil for December delivery fell $2.67 to $52.50 a barrel on the New York Mercantile Exchange yesterday. Prices had reached $55.67 on Oct. 2.

• This article is based in part on wire service reports.