U.S. calls 4% OPEC oil cutbacks disappointinggreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
WIRE: 03/17/2001 1:22 pm ET
UPDATE 1-U.S. calls OPEC oil cutbacks disappointing
WASHINGTON, March 17 (Reuters) - U.S. Energy Secretary Spencer Abraham said on Saturday that a decision by OPEC oil producers to cut supplies to shore up prices was "disappointing" and underlined the need to step up crude production within the United States. "In light of the current world economic conditions, OPEC's decision to cut their oil production quotas is disappointing," Abraham said in a statement. The oil cartel's action comes amid a U.S. economy slowdown that threatens a decade-long record expansion.
Members of the Organization of Petroleum Exporting Countries decided in Vienna on Saturday to shave a further million barrels per day, or 4 percent, in its production to defend a $25-a-barrel price target.
The producers played down the potential impact of their cutbacks on global energy and production costs.
"I don't think the price of crude is all that significant," said Ali al-Naimi, the oil minister for Saudi Arabia, the world's biggest oil producer. He was speaking after the OPEC meeting ended.
But U.S. oil prices edged up on commodity markets throughout the past week as traders bet OPEC would trim its output, and higher prices will eventually find their way to consumers at the gas pumps and into factories' production costs.
LOW WHITE HOUSE PROFILE
Abraham noted that President George W. Bush wanted to increase America's energy security by reducing reliance on imported oil.
"OPEC'S decision today demonstrates the importance of increasing America's domestic production and developing a national energy policy that will ensure a stable, reliable, affordable and diverse energy supply," Abraham said.
The White House continued to maintain a deliberate low profile on the OPEC oil cuts on Saturday, leaving it to the Energy Department to express disappointment.
White House spokesman Scott McClellan said OPEC's decision only underlined the need for a national energy policy.
"Today's decision highlights once again the need for America to reduce our dependence on foreign oil and that's why the president has made development of a comprehensive national energy strategy a front-burner issue in his administration," he told Reuters.
Bush has stressed that rising energy prices underscore the need for approval of his $1.6 trillion, 10-year tax cut plan, warning that costlier prices were bound to squeeze consumers' pocketbooks.
Worry about higher-priced energy also has been a factor in recent plunges in U.S. stock prices, as investors worry that it will make it difficult for corporations to maintain healthy profits and to keep the economic slowdown from becoming the first U.S. recession since 1990-91. http://abcnews.go.com/wire/World/reuters20010317_770.html
-- Carl Jenkins (firstname.lastname@example.org), March 17, 2001