McCain calls for halt of U.S. SPR oil purchases

By Chris Baltimore

WASHINGTON (Reuters) - Republican U.S. presidential candidate John McCain on Thursday broke with President George W. Bush and called for the government to stop filling its strategic oil stockpile, with crude oil at a near-record at around $110 a barrel.

McCain, a U.S. senator from Arizona, joined his two Democratic challengers -- Sen. Hillary Clinton of New York and Sen. Barack Obama of Illinois -- in calling on the Bush administration to stop filling the reserve.

"With oil at over $100 a barrel and an adequate supply in the (Strategic Petroleum Reserve), it is time to suspend purchases," McCain told businessmen in Brooklyn, New York, on Thursday. "If the classic laws of supply and demand hold, we should see a welcome decrease in the price of oil.

As U.S. benchmark crude oil prices hit a record $112.21 a barrel on Wednesday, the Bush administration insists that reserve-filling efforts account for less than one-tenth of 1 percent of daily supply, and have no meaningful impact on prices.

"We continue to fill the reserve to provide an added layer of protection to the American people in cases of severe supply disruption," White House spokesman Scott Stanzel said on Thursday.

The nearly 701 million barrels of crude oil socked away in underground salt caverns in Louisiana and Texas are meant as a supply buffer in case of major supply disruptions like the 2005 hurricanes that plowed into the Gulf Coast oil patch. It was created by Congress in 1975 after the Arab oil embargo.

Current shipments come to about 70,000 barrels per day, while the United States uses about 21 million barrels of oil a day.

Democrats in the U.S. Congress are pursuing legislation that would require the Energy Department to suspend shipments to the reserve if prices are too high.