Richardson wants more oil-again

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Needed: More Oil

U.S. Energy Secretary Calls For More OPEC Oil Production OPEC Decides Not To Increase Production Major Oil Producer Saudi Arabia Plays Moderate Role

WASHINGTON, Nov. 14, 2000 (CBS) U.S. Energy Secretary Bill Richardson said Tuesday that despite OPEC's decision not to raise oil production, more crude is needed in world markets.

"We still think there's a supply problem; that the world needs more production," Richardson said during a televised interview.

Richardson said current oil prices around $34 a barrel are too high, and the Clinton administration would prefer crude to drop to the $20 to $25 price range.

He also said it was regrettable that some OPEC ministers were "price hawks" that don't want to see production increases and actually want to reduce the cartel's output.

"Regrettably some (OPEC members) are talking about production cuts at a time when it is very, very possible that we need more oil on the market," he said. Richardson did not name the specific OPEC countries in question.

Saudi Arabia is probably not one of them. Playing a moderate role in OPEC affairs, Saudi Oil Minister Ali Naimi said Saudi Arabia is keen on cooperation between oil producing and consuming nations in order to stabilize the market and benefit the world economy.

The minister, whose comments were carried by the official Saudi Press Agency, said a three-day Energy Summit that begins in Riyadh, the Saudi capital, on Friday aims to establish communication channels and prevent any disagreement between exporting and consuming countries.

"Our aim is to work to safeguard everyone's interest through a transparent free market and the continuation of the dialogue and understanding between the different sides," Naimi said.

OPEC President Ali Rodriguez said Monday that high prices were being fueled by speculation, high taxes in consumer nations and refining bottlenecks, a statement OPEC officials have often made this year, which in turn has raised considerable political ire in the U.S.

However, Naimi said it was not "correct" to blame OPEC for high prices when taxes in consuming countries are as high as 70 to 80 percent.

"What we mean is that the basis of the cooperation is frankness and transparency, not blaming or accusing the other side," Naimi said.

He said on Monday that production will not be increased before January, an assertion that could run afoul of an informal OPEC agreement aimed at keeping prices between $22 a barrel and $28.

Under that agreement, reached earlier this year, OPEC members pledged that if average prices for crude remain above $28 for 20 consecutive days, they would hike daily production by 500,000 barrels.

They last did that just 14 days ago, but prices are still above the upper limit and likely to stay there long enough to require another production increase under the agreement.

They argue the market needs more time to digest the 3.7 million barrels a day in hikes already agreed to this year.

http://cbsnews.cbs.com/now/story/0,1597,249493-412,00.shtml

-- Martin Thompson (mthom1927@aol.com), November 14, 2000


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