World Tribune.com

White House anxious about OPEC output, oil prices

SPECIAL TO WORLD TRIBUNE.COM
Tuesday, March 21, 2000

WASHINGTON -- The Clinton administration has launched a second drive to ensure that the OPEC cartel increases oil output to a level that would assure a quick decrease in oil prices.

U.S. Energy Secretary Bill Richardson left Washington for another round of talks with key OPEC members. They include Algeria, Indonesia, Nigeria and the United Arab Emirates.

Richardson's trip is meant to persuade OPEC members to agree to a significant oil increase during a summit by oil ministers on March 27 in Vienna. OPEC members have agreed in principle to a gradual increase but U.S. officials are concerned that the rise in oil output would not affect prices until summer or replenish U.S. stocks.

"The issue between now and March 27 is how much [oil] and how soon, and that's what we're working on intensively right now," Richardson said. "We need a sizable increase and we need to move that oil into the world market right away."

Oil analysts said OPEC appears willing to increase output by one million barrels, half of what the Clinton administration is demanding. U.S. officials want a quick reduction in gasoline prices, now more than $1.50 a gallon, a reflection of the $30 a barrel in crude oil.

The officials said that without a drastic increase in OPEC oil output, gasoline prices could reach $2 a gallon in July.

The rise in gasoline prices has alarmed the administration to the point where some officials are quietly urging that the United States use its strategic oil reserve of 569 million barrels to increase supply.

"The president has not ruled that option out at all," Richardson said. "Right now our energy diplomacy is working."

On Sunday, Sen. Charles Schumer, a New York Democrat, called for the sale of one million barrels a day from the Strategic Petroleum Reserve unless OPEC increases production by two million barrels a day.

Tuesday, March 21, 2000


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