Bodman says no need to use SPR to combat record oil prices

Bodman says no need to use SPR to combat record oil prices

Washington (Platts)--21Apr2006

There is no current need for the US Department of Energy to use the
federal Strategic Petroleum Reserve to help lower oil and gasoline prices, US
Energy Secretary Samuel Bodman told reporters Friday.

"The SPR is meant to deal with interruptions in supply," Bodman said on
the sidelines of a science and technology conference in Washington. "We have
not had a severe interruption in supply at this point."

Bodman said oil and gasoline prices are "too high," and could act as a
tax on economic activities and be a "horrific burden" on Americans.

He added there was no "magic wand" available to lower prices, and
encouraged cooperation between producers and consumers to ensure a transparent
market.

Bodman was traveling Saturday to Doha, Qatar, for the International
Energy Forum, a biannual meeting of major producer and consumer nations. He
said he had bilateral meetings scheduled with counterparts representing
consuming and producing nations, but declined to say which countries. Bodman
said he would not be meeting with officials from Iran to discuss the US'
concern about Tehran's nuclear program.

Bodman said that he believes that oil producers, including OPEC, are
producing flat out. "It seems to me that producing nations are producing
everything they can produce," he said.

Bodman also said OPEC and non-OPEC producers feel that current prices are
too high.

Gasoline prices, which have spiked in recent weeks, due to the shift from
winter to summer-grade gasoline and from gasoline with MTBE to gasoline with
ethanol, should level within the next few months he said, assuming there are
no major supply disruptions, such as another hurricane.

Bodman said supplies of ethanol were "adequate" but that there needed to
be a shifting of transportation to ensure that those ethanol supplies could
get to the right markets at the right time.

Bodman said he was "not aware" of any specific incidents of price-gouging
or profiteering with gasoline prices, but that the Energy Department would
be carefully monitoring markets and was asking motorists to report any
suspected anticompetitive behavior.

--Cathy Landry, cathy_landry@platts.com

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