U.S. Says OPEC Must Act Quickly to Pump More Oil...greenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
Friday March 3 2:06 PM ET
US Says OPEC Must Act Quickly to Pump More Oil
By Tom Doggett
WASHINGTON (Reuters) - With the politically painful prospect of $2.00-a-gallon gasoline looming this summer, the Clinton administration on Friday appealed to OPEC to swiftly boost oil production to ease tight world supplies.
Saudi Arabia and Venezuela, two of OPEC's most influential members, and non-OPEC exporter Mexico met this week to try to calm growing fears among industrialized countries that prices are spiraling out of control and will slow economic growth.
But the assurance by the trio that they would support some kind of increase in production -- without identifying specific volumes or timing -- fell short of what industry analysts, U.S. lawmakers and oil traders had sought.
``We're not out of the woods yet,'' said Energy Secretary Bill Richardson, adding that OPEC must boost output ``in a timely fashion...and get oil into the market''.
Richardson said he would continue to be in close contact with key oil ministers, and planned to speak with Kuwait's oil minister next week.
In the jittery New York oil futures market, crude prices fell sharply to $31.17 by midday. The decline was prompted by traders taking profits ahead of the weekend and vague rumors that some major producers may have already begun increasing production.
OPEC Secretary General Rilwanu Lukman said the cartel would definitely raise production, but the increase had to be carefully managed. The entire 10-member cartel is scheduled to meet on March 27 to map out its output plan for the coming six months.
``We have to be careful not to create a problem in the opposite direction. We don't want prices to go back to $10 a barrel,'' Lukman told BBC Radio in London.
Other OPEC sources said the cartel needed time to build a consensus on policy before pumping more oil.
``Saudi Arabia will never allow a crude shortage. Saudi Arabia will never let down its customers,'' said one Gulf source familiar with OPEC's strategizing.
President Clinton met on Thursday with more than a dozen lawmakers who have warned that U.S. retail gasoline prices could soar as high as $2.50 a gallon by the summer unless OPEC takes immediate action.
U.S. lawmakers, worried about gasoline prices becoming an issue in the November election, have clamored for the administration to cut off foreign aid and arms sales to OPEC nations. Congressional representatives from oil-producing states are also seeking new incentives to encourage more domestic drilling by American oil companies.
Richardson said the White House was taking a close look at what options it had to encourage American companies to drill more oil domestically.
``It is clear that we have to have a comprehensive strategy,'' Richardson said in an interview with CNN. ``We're looking at ways to help our domestic producers.''
The White House's strongest weapon is perceived to be the nation's 570-million-barrel Strategic Petroleum Reserve.
While administration officials have repeatedly said they would prefer not to release any stockpiled oil, that option remains on the table if OPEC fails to act decisively. The crude oil in the reserve is roughly equivalent to two months' worth of U.S. import needs.
-- Out Of Gas $$$ (email@example.com), March 04, 2000
And your link is?
-- (firstname.lastname@example.org), March 04, 2000.
Sorry about forgetting the link. Long time lurker, first post. I am also link impaired, so someone please hot link for me. Thanks! http://dailynews.yahoo.com/h/nm/20000303/pl/_oil_usa_1.html
-- Out Of Gas $$$ (Staying@home.net), March 04, 2000.
-- lance-a-lot link (email@example.com), March 04, 2000.