Time To Unsheathe Petroleum Reserve As Market Weapon?(ISSUES & INSIGHTS)(PERSPECTIVE)

Byline: ALAN REYNOLDS

The OPEC oil cartel agreed to cut production targets by a million barrels a day, about 4%. White House spokesman Scott McClellan said, "The United States continues to emphasize that oil prices should be determined by market forces."

But OPEC happens to be one of those "market forces." And so is the U.S. Strategic Petroleum Reserve (SPR).

Since November 2001, the U.S. government has been adding about 160,000 barrels a day to the 651 billion barrels already stockpiled in the Strategic Petroleum Reserve. During that time, oil prices rose from less than $20 a barrel to as much as $37.

Yet the Energy Department plans to buy another 202,000 barrels a day in April. It can't resist a bad bargain. Some 55 members of the House wrote to the president earlier this month urging the administration to stop adding to reserves.

Sen. John Kerry also seized this opportunity.

"The Bush administration has put (the SPR) program on automatic pilot without regard to the short-term effect on the U.S. market," the Kerry campaign said.