Bush Halts Oil Reserve Accumulation

President Bush instructed his Cabinet on April 25 to stop filling the Strategic Petroleum Reserve (SPR) in order for more oil to reach the market by this fall when the high-demand season ends.

The U.S. was set to purchase 2.1 million barrels of oil in May for SPR, one-tenth of the nation’s daily consumption of 21 million barrels. The oil market predicted that the decision would end up to be no more than a symbolic gesture, said sources.

West Texas Intermediate crude oil price for June delivery on the New York market closed at $72.88 per barrel, slightly lower (0.6 percent) than the day before.

The president ordered the Department of Justice and the Federal Trade Commission to investigate whether oil refiners gaining huge net profit had unjustly raised oil prices high through cartels.

The decision came after strong public criticism of the generous $400 million retirement package given to Exxon Mobil CEO Lee Raymond.

President Bush also said that oil refining companies will not be able to enjoy all tax credits while turning such huge profits, and that the government may get rid of tax credits worth billions of dollars annually.

Seung-Ryun Kim srkim@donga.com