Bush Doesn’t Plan to Tap Oil Reserves : Energy: Current supplies in the world market appear adequate, U.S. says. Other nations agree no immediate measures are required.

With energy prices stabilizing in world markets, the White House said Thursday that it does not plan to draw down the nation’s vast strategic petroleum reserve at this time.

On Wednesday, President Bush had announced that he would consider using some of the 590 million barrels of oil in storage in underground salt domes in Texas and Louisiana as part of a coordinated effort with other nations to address a potential world oil shortage.

The decision to leave the reserve untouched came as the United States and 20 other nations, meeting in Paris under the aegis of the International Energy Agency, agreed that no immediate measures are required to help offset the loss of oil from Iraq and Kuwait.

Oil analysts have been almost unanimous in urging the White House to dip into the strategic petroleum reserve--which contains enough oil to cover total U.S. imports for about 80 days--to help dampen the recent oil price surge that some fear could push the economy into a recession.

But White House spokesman Marlin Fitzwater told reporters Thursday that the Administration has “no intention” at the moment of drawing from the reserve.

Administration officials, saying that they are prepared to move quickly if necessary, argued that current oil supplies in the world market appear adequate to avoid shortages.

“We’ve got the largest stock of private oil in storage in nine years,” said Michael Boskin, Bush’s chief economic adviser.

“Moreover, the President is working very, very forcefully to encourage other countries to expand oil production to replace embargoed supplies from Iraq and Kuwait,” he added. “And we will continue to explore the possible use of reserves in coordinated fashion with other nations.”

Boskin also said the U.S. economy, no longer hobbled by the intricate maze of energy regulations of the 1970s and considerably more energy-efficient than a decade ago, is in much better position to absorb an energy shock.

In Paris, the representatives of 21 major industrial nations, including U.S. energy official John Easton, met to review whether they should take any particular steps in response to the Iraqi embargo.

“Sufficient oil supplies are currently available to compensate for the loss of Iraqi and Kuwaiti crude and (refined products) to the market,” energy officials concluded in an official statement after the daylong meeting.

But the International Energy Agency will take steps to “sharpen preparedness if the situation deteriorates,” chairman Ulrich Engelmann said at a news conference. “We must be prepared for that.” Other officials said that the nations are ready to tap their own reserves if that proves necessary.

“We will draw down the Strategic Petroleum Reserve--in cooperation with our allies--if the severity of the situation warrants it,” Easton said.

Engelmann blamed speculation for dramatic increases in oil prices but said that the higher prices should help dampen demand. He predicted that some OPEC members will boost production, but did not say which ones or by how much.

Officials said that encouraging energy conservation and urging industry and utilities to switch from oil-based fuels to natural gas also would help prevent shortages.

The energy agency is empowered to help its members survive the potentially damaging loss of about 4.5 million barrels of daily oil production from Iraq and Kuwait. Its two main tools are to inject emergency supplies into the market and share oil with members suffering the worst shortages.

The emergency sharing program is the group’s ultimate weapon, which it may authorize if 7% of projected supplies to the member nations as a whole or to any of its members is blocked. The lost supplies from Iran and Kuwait represent about 7% of world oil consumption, but officials suggested that they do not expect to have to put the sharing system into effect.

Oil supplies have not been affected by the boycott yet, Engelmann said, because shipments from Iraq or Kuwait to member countries normally take 10 days. The United Nations imposed the embargo Monday to punish Iraq’s invasion of its smaller neighbor a week ago.

Delegates will meet again in two weeks, when the market could begin to feel the shortfall.