Bush Urges OPEC To Increase Oil Output

RIYADH — President Bush urged OPEC nations today to put more oil on the world market and warned that soaring prices could cause an economic slowdown in America.“High energy prices can damage consuming economies,” the president told a small group of reporters traveling with him in the Middle East.“It’s affected our families. Don’t get me wrong — paying more for gasoline hurts some of the American families, and I’ll make that clear to him,” Mr. Bush said, heading into more talks with King Abdullah of Saudi Arabia. Shortly after Mr. Bush spoke, the Saudi oil minister said the kingdom, responsible for almost one-third of the cartel’s total output, would raise oil production when the market justified it.In a stern warning to Iran days after a January 6 confrontation with American warships in the Persian Gulf, Mr. Bush put Tehran on notice that it needs to be careful. The president said it would not matter to him whether an attack against an American vessel resulted from an order by the government in Iran or a rash decision by an Iranian boat captain.“It’s not going to matter to me one way or another,” Mr. Bush said. If the Iranians hit an American ship, “there are going to be serious consequences,” he said.American officials claim Iranian speedboats swarmed three Navy warships in the Strait of Hormuz, the narrow waterway that is the only entry and exit to the Persian Gulf. They said U.S. Navy commanders were considering firing warning shots, before the retreat of the five Iranian speedboats, which the Pentagon said were operated by the elite Revolutionary Guards.Iran has denied that its boats threatened the American vessels, saying the incident was a normal occurrence, and accused Washington of fabricating video and audio it released. Iran’s government has released its own video, which appeared to be shot from a small boat bobbing at least 100 yards from the American warships.The president spoke to reporters before meeting late today with King Abdullah, whose country holds the world’s largest supply of oil. Bush said American consumers are feeling the pain of rising oil prices, which topped $100 a barrel this month.“When consumers have less purchasing power, it could cause the economy to slow down,” Mr. Bush said. “I hope OPEC nations put more supply on the market,” he added. “It would be helpful.”The Organization of Petroleum Exporting Countries next meets February 1 in Vienna, Austria, to consider increasing output. OPEC oil accounts for about 40% of the world’s needs, and OPEC ministers often follow the lead of the Saudis when discussing whether to increase production to take the pressure off rising prices. The Saudis’ views carry great weight because of its large share of output.At the same time, he acknowledged that the higher prices reflect supply and demand, and that there is little excess capacity in the marketplace. Mr. Bush said a growing demand for oil, especially from fast-growing India and China, is straining supply and lifting prices.“Oil is commodity,” he said. “It isn’t something that you just turn on a tap. It requires investment, exploration, a lot of capital.”“A lot of these oil producing countries are full out” in terms of what they can produce, he said.Asked whether he thought the American economy was sliding toward recession, as some economists predict, Mr. Bush said, “These are times of economic uncertainty, but I have confidence in the future.” He said the underpinnings of the economy were strong, and “I’m optimistic.”In Washington, two government reports released today added to fears of a recession: Wholesale inflation shot up in 2007 by the largest amount in 26 years and retail sales fell in December.Mr. Bush’s administration and Congress are looking at ways to give the economy a boost. Options include tax cuts, tax rebates, and other incentives. Asked what steps he believed were necessary, Mr. Bush said: “We’re going to watch very carefully.”The Saudi oil minister, Ali Naimi, said the American economy is significant to the oil market and demand. “I’m sure no one will look with pleasure on a recession in the U.S. On the contrary, all our effort is to maintain prosperity and growth in all countries, particularly the number one consuming nation in the world,” he said.But the minister said oil is not the only reason for the slowing American economy. “The concern for the U.S. economy is valid, but what affects the U.S. economy is more than the supply of oil,” he said.

Bush Urges OPEC To Increase Oil Output

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