Clinton Calls Oil a Recession Risk : LUSENET : TB2K spinoff uncensored : One Thread

Thursday September 7, 1:37 pm Eastern Time

Clinton Calls Oil a Recession Risk

Associated Press Writer

NEW YORK (AP) -- President Clinton said Thursday he fears the high cost of oil could lead to a recession in the roaring U.S. economy or elsewhere in the world, and said he has asked the Saudis to help lower crude prices.

Clinton met with Saudi Arabia's Crown Prince Abdullah on the fringes of the U.N. Millennium Summit.

``I told him I was very concerned that the price of oil is too high, not just for America but for the world,'' Clinton said before beginning another session with a world leader -- this one with South Korean President Kim Dae-jung.

Clinton said he told Abdullah ``that if it was to cause a recession in any part of the world that would hurt the oil-producing countries.''

``There were other reasons why it's not in our interest, and he agreed with that, he's been very strong about that,'' Clinton said, adding that he hopes the Organization of Petroleum Exporting Countries will take ``appropriate action,'' to lower prices.

National Security Council spokesman P.J. Crowley declined to characterize the crown prince's response to Clinton. ``We believe the Saudis understand there's a balance of interests here between producing countries and consuming countries,'' Crowley said. ``But as to what, how the Saudis plan to approach the OPEC meeting this weekend, I think it's for the Saudis to characterize their position.''

Oil prices have more than tripled since hitting a 12-year low of less than $11 a barrel in December 1998, before OPEC slashed production to force prices higher.

Abdullah said earlier this week that his oil-rich country is working to stabilize world oil prices but consumer countries must contribute to this effort by reducing fuel taxes.

His comments came hours before crude oil futures hit a 10-year high on the New York Mercantile Exchange.

Speaking to American businessmen Tuesday night, Abdullah also said his country is moving forward on an economic reform program designed to lure foreign investment and lessen the country's reliance on its main source of income: revenues from oil sales.

``Saudi Arabia will continue to make every effort to ensure equilibrium in the oil markets and to stabilize prices,'' said Abdullah, whose country is the world's top exporter of oil. ``This requires the cooperation of all producing countries, whether they are members or nonmembers of OPEC.''

But, Abdullah said, taxation by oil-consuming countries also puts pressure on prices. ``These taxes, which bear heavily on consumers, should be reconsidered,'' he said.

Last month, Saudi Arabia said it would work with other OPEC members to increase output to stabilize oil prices, which have topped $30 per barrel. Market experts say the 500,000 barrels a day of additional production that OPEC is expected to approve at its meeting in Vienna this weekend is not enough to meet heavy world demand.

On Wednesday in London, prices of Brent crude for delivery in October hit a 10-year high of $33.50 a barrel. On the New York Mercantile Exchange, oil for delivery in October surpassed the previous 10-year high of $34.37, reaching $34.45 before declining to $34.31.

-- AP (Financial@news.article), September 08, 2000

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