RIYADH (Reuters) - U.S. Energy Secretary Sam Bodman said on Saturday that Saudi Arabia should raise output to ease tightness in world oil supplies and that OPEC should up output at its February 1 meeting.
By Andrew Hammond
RIYADH (Reuters) - U.S. Energy Secretary Sam Bodman said on Saturday that Saudi Arabia should raise output to ease tightness in world oil supplies and that OPEC should up output at its February 1 meeting.
"I think it is possible for there to be an increase in supply over a period of time because there is a reserve," he told reporters, referring to Saudi Arabia. "I believe they have to alleviate this problem."
"It's important there's an increase in supply," he said, when asked whether he wanted producer cartel OPEC to commit to a production increase at a February 1 meeting in Vienna.
!ADVERTISEMENT!"The figures would indicate a call for increased supplies. As to the numbers, I wouldn't like to speculate."
Bodman is on a tour of Middle East countries, after U.S. President George W. Bush visited the region last week.
Bush said he would ask Saudi King Abdullah for Saudi Arabia to take action to help lower high world oil prices, which Washington fears risk sending its economy into recession.
Saudi Arabia is the world's largest oil exporter and acts as OPEC's "swing producer" because of its reserve capacity.
There has been no word on what the king told Bush.
"They agreed on the importance of continuing balance in the stability of the market," a statement on the state-owned Saudi Press Agency said after Bodman later had a meeting with Saudi Oil Minister Ali al-Naimi.
The statement said they agreed on "cooperation to exchange information on future plans and action for stability in world oil markets," but gave no more details.
Naimi has said oil prices are a reflection of market conditions, and pointed to increased supplies expected from countries such as Angola.
He has also cited limited refining capacity in the United States as well as speculators raising prices by up to $30 per barrel.
Bodman said before his meeting with Naimi that he agreed more refineries were needed in the United States but played down the speculation argument.
"Minister Naimi is right. We would be well-served by having more capacity and we'll continue to work on it," Bodman said. But he added: "We've looked at speculation ... It doesn't seem to have much effect on absolute figures."
Bodman suggested that the Saudi view that production from Angola and non-OPEC countries would help meet global supply needs was misjudged.
"This is one of the judgements he (Naimi) has to make. How real is that? Are those real numbers? You probably have to discount to some degree," he said.
"It's my view there's a call for more supply (from OPEC) ... Today it's not as free as it should be."
(Reporting by Andrew Hammond, Editing by Lin Noueihed)
