Oil Price Falls Following DOE Report

Congress Votes to Suspend SPR Shipments
Gulf of Mexico Platform — Bill Lang/Trans Pixs

Oil prices fell more than $1 a barrel Wednesday following an Energy Department report that showed inventories improved last week, and both the House and Senate voted to suspend crude shipments to the nation’s Strategic Petroleum Reserve, Bloomberg reported.

Oil fell $1.56 to close at $124.24 on the New York Mercantile Exchange, following a DOE report that showed stockpiles rose by 176,000 barrels last week, Bloomberg said.

Distillate supplies, which include diesel, rose 1.3 million barrels, while gasoline inventories fell 1.7 million barrels, DOE said in its weekly report.

Meanwhile, both the House and Senate voted overwhelmingly Tuesday to suspend daily shipments to the SPR, with crude prices at record levels, news services reported.

The Senate voted 97-1 to suspend shipments for the rest of the year, followed by a House vote of 385-25 to halt deliveries, the Associated Press reported.

The votes do not require the Bush administration and DOE to act immediately, because the two measures differ slightly and would need to be reconciled before final congressional approval, AP said.

President Bush would not veto the measure, a White House spokesman said, though he does not believe that the move would lower gasoline prices, AP reported.

Following the two votes, DOE said it would review bids to fill the SPR, Bloomberg reported. The reserve currently holds about 702.7 million barrels of crude, with a capacity of 727 million barrels.