NEW YORK - A move to stop filling the U.S. emergency oil reserve will do little to slow the record spike in fuel prices that is intensifying an economic slowdown in the world's biggest energy consumer.
U.S. lawmakers voted overwhelmingly this week on bills to suspend adding oil to the Strategic Petroleum Reserve until oil prices slip back to $75 a barrel from current levels around $125 -- a proposal that the White House has consistently opposed.
The move would redirect an estimated 70,000 barrels of crude oil per day into the market -- supply that would otherwise have been shipped to the reserve.
"How many knots would a cruise ship gain if you threw off a deck chair? That's how insignificant this would be," said Peter Beutel, president of oil consultancy Cameron Hanover.
The United States consumes about 20.5 million barrels of crude oil per day, representing roughly a quarter of world demand.
Oil prices have risen six-fold since 2002, hitting a record near $127 a barrel on Tuesday, as surging energy needs in China and other developing nations squeeze available supply. The surge has added pressure to the U.S. economy, already hard-hit by a credit crisis and housing crunch.
Lawmakers, who want to get a final bill to the White House this month to halt SPR deliveries, have said the move could help pull down gasoline prices by 5 to 25 cents a gallon.
But energy experts are skeptical.
"This is a relatively limited flow of oil we're talking about, so I'm not expecting this move would immediately override the volume of investor buying on the energy futures market," said Tim Evans, energy analyst for Citi Futures Perspective.
He said the U.S. government's best lever for stemming the energy price spike would be to release oil from the reserve, not just halt adding barrels.
"A release of oil from the SPR would send a message that traders would have to respect the possibility that government can take real action to supply the market," he said.
"At the moment, the prevailing assumption is that there will be no release of oil from the SPR, that the oil goes in and it never comes out. To the extent that's true, the SPR is the equivalent of a price support program."
The White House said earlier this week it would not sell oil from the stockpile.
The reserve was created by Congress in 1975 in response to the Arab oil embargo which cut U.S. oil supplies and caused long lines at the gasoline pumps, and is designed for use during supply shocks.
The White House has said current conditions do not justify a release from the reserve, which currently holds 703 million barrels or just more than a month of nationwide usage at current rates.
"We should have stopped (filling the SPR) $50 ago. But it is such a small percentage of overall demand it won't have much of an effect right now," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.
"We're in a bull market and even though every drop helps, a small amount like this will probably be ignored by the trading community."
While analysts said that even though the additional oil is unlikely to affect prices that much, it at all, Democratic Rep. Edward Markey said, "Every little bit helps."
U.S. lawmakers voted overwhelmingly this week on bills to suspend adding oil to the Strategic Petroleum Reserve until oil prices slip back to $75 a barrel from current levels around $125 -- a proposal that the White House has consistently opposed.
The move would redirect an estimated 70,000 barrels of crude oil per day into the market -- supply that would otherwise have been shipped to the reserve.
"How many knots would a cruise ship gain if you threw off a deck chair? That's how insignificant this would be," said Peter Beutel, president of oil consultancy Cameron Hanover.
The United States consumes about 20.5 million barrels of crude oil per day, representing roughly a quarter of world demand.
Oil prices have risen six-fold since 2002, hitting a record near $127 a barrel on Tuesday, as surging energy needs in China and other developing nations squeeze available supply. The surge has added pressure to the U.S. economy, already hard-hit by a credit crisis and housing crunch.
Lawmakers, who want to get a final bill to the White House this month to halt SPR deliveries, have said the move could help pull down gasoline prices by 5 to 25 cents a gallon.
But energy experts are skeptical.
"This is a relatively limited flow of oil we're talking about, so I'm not expecting this move would immediately override the volume of investor buying on the energy futures market," said Tim Evans, energy analyst for Citi Futures Perspective.
He said the U.S. government's best lever for stemming the energy price spike would be to release oil from the reserve, not just halt adding barrels.
"A release of oil from the SPR would send a message that traders would have to respect the possibility that government can take real action to supply the market," he said.
"At the moment, the prevailing assumption is that there will be no release of oil from the SPR, that the oil goes in and it never comes out. To the extent that's true, the SPR is the equivalent of a price support program."
The White House said earlier this week it would not sell oil from the stockpile.
The reserve was created by Congress in 1975 in response to the Arab oil embargo which cut U.S. oil supplies and caused long lines at the gasoline pumps, and is designed for use during supply shocks.
The White House has said current conditions do not justify a release from the reserve, which currently holds 703 million barrels or just more than a month of nationwide usage at current rates.
"We should have stopped (filling the SPR) $50 ago. But it is such a small percentage of overall demand it won't have much of an effect right now," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.
"We're in a bull market and even though every drop helps, a small amount like this will probably be ignored by the trading community."
While analysts said that even though the additional oil is unlikely to affect prices that much, it at all, Democratic Rep. Edward Markey said, "Every little bit helps."
