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Gov't may tap emergency oil stockpile


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WASHINGTON (Reuters) - The Bush administration said Monday it would consider loaning crude oil from the government's emergency stockpile, if requested by U.S. refiners facing delayed shipments due to Hurricane Katrina.


"Certainly that option is on the table and it is a possibility based on what we have done in the past with other hurricanes," an Energy Department spokesman said.


However, the Energy Department has not yet received a formal request for loans from the Strategic Petroleum Reserve (SPR), a crucial administrative step that starts the decision-making process, the spokesman said.


"There hasn't been a request yet, and we aren't going to make a decision before there is a request," the spokeman said.


Hurricane Katrina slammed into the Louisiana coast on Monday with 140 mile per hour winds in a blow aimed at the heart of the U.S. oil patch.


"We are in contact with individuals down at the SPR, and also with oil producing companies and refiners," the spokesman said. "We'll have more information in the next 24 to 48 hours on which we can base any kind of recommendation or decision."


An estimated 633,000 barrels of daily crude oil production, 42 percent of the daily average output from the Gulf Coast, was halted as of Sunday because of Katrina.


At least eight refineries with a combined capacity of 1.8 million bpd were also shut down, according to operators.


The U.S. government loaned, or "exchanged," some 5.4 million barrels of crude oil from the Strategic Petroleum Reserve last year following supply disruptions caused by Hurricane Ivan.


Democrats on Monday renewed their calls for the administration to tap the reserve as crude oil futures hovered near $70 a barrel.


"Skyrocketing gas prices have tipped consumers upside down this summer and to protect our economy, the president should act immediately to tap the SPR," Sen. Chuck Schumer of New York said.


Crude oil prices soared on worries that Hurricane Katrina would disrupt the already delicate balance between U.S. gasoline supply and demand. In overnight trading, crude oil futures for October delivery set a record high of $70.80 a barrel.


The government stockpile consists of more than 700 million barrels of crude oil stored in underground salt caverns in Louisiana and Texas.



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