Bush asks OPEC not to hurt US
One day after OPEC’s surprise decision to cut oil supplies, US President George Bush pressed Saudi Arabia and other cartel members not to act in ways that threaten the American economy.
The president’s highly unusual message to OPEC on Thursday underscored the administration’s concerns about the potential impact of higher energy prices on the nation’s fragile economic recovery in the run-up to next year’s presidential election.
“My reaction is that I would hope our friends in OPEC don’t do things that would hurt our economy,” Bush told reporters at the White House when asked about OPEC’s decision, which could raise fuel costs this winter.
Market forces
White House spokesman Scott McClellan said the administration was consulting OPEC members, who control half the world’s oil trade, and asserted that “market forces” should determine oil prices.
“Oil prices should be determined by market forces so that we can ensure adequate supplies. Producing and consuming countries both have an interest in ample, affordable energy supplies,” McClellan said.
“Obviously we have ongoing and regular consultations with major oil producers around the world and those will continue,” he said.
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“My reaction is that I would hope our friends in OPEC don’t do things that would hurt our economy” George Bush, |
The Organisation of Petroleum Exporting Countries (OPEC) agreed on Wednesday to reduce production for 10 members by 900,000 barrels per day to 24.5 million bpd, effective 1 November.
It cited rising inventories, a fall in prices in September and the gradual return of Iraqi crude to the world market.
World oil prices surged more than a dollar after OPEC’s decision, with US light crude settling on Thursday at $28.29 a barrel and London Brent at $26.81.
Analysts said the output pact sent a powerful message that the Saudi-led cartel was determined to defend crude near the top of its $22-$28 price target, even at the risk of upsetting Washington.
Riyadh has come under heavy criticism in the US since the September 11 attacks, but won high marks from the Bush administration for opening the pumps before the US-led invasion of Iraq.
High-energy prices have emerged as an important election-year issue for Bush, who has seen his approval ratings slide amid growing unrest in Iraq and layoffs at home.