Thread: Saudis see no reason to raise oil production now

Saudis see no reason to raise oil production now


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May 16, 11:22 AM (ET)


RIYADH, Saudi Arabia (AP) - Saudi Arabian leaders made clear Friday they see no reason to increase oil production until their customers demand it, apparently rebuffing President Bush amid soaring U.S. gasoline prices.

During Bush's his second personal appeal this year to King Abdullah, Saudi officials stuck to their position that they are already meeting demand, the president's national security adviser told reporters.

"What they're saying to us is ... Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy," Stephen Hadley said on a day when oil prices topped $127 a barrel, a record high.

The Saudi government indicated that it is willing to put on the market whatever oil is necessary to meet the demand of its customers, Hadley said.



But even then, he said, Saudi leaders say increased production would not dramatically reduce pump prices in the United States.

The Saudis are investing in ways to increase oil production over time. Officials told Bush they are doing "everything they can do" for now to address a complicated market.

Hadley said the Bush administration will take the explanation back to its own experts and "see it if conforms."

When Bush and Abdullah met in the kingdom in mid-January, the president also sought more Saudi output but got a chilly response to that plea. Saudi Arabia said it would increase production only when the market justified it and that production levels appeared normal.

Bush acknowledges that raising output is difficult because the demand for oil - particularly from China and India - is stretching supplies. Also, economists say prices are being driven up by increased demand, not slowed production.


THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

RIYADH, Saudi Arabia (AP) - The White House says Saudi Arabia's leaders are making clear they see no reason to increase oil production until customers demand it.

President Bush was in the oil-rich country Friday to appeal to King Abdullah for greater production to help halt rising gas prices in the United States.

But his national security adviser, Stephen Hadley, says Saudi officials stuck to their position that they already are meeting demand.

Hadley told reporters, "What they're saying to us is ... Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy."

Oil prices climbed to a new high on Friday, topping $127 a barrel.


http://apnews.myway.com//article/200805 ... QF200.html

It wasn't mentioned in the article but I'm sure the value of the U.S. dollar has a lot to do with the price spike we've seen.