OT (Oil Topic) U.S. urges lower oil price, Kuwait cautious

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U.S. urges lower oil price, Kuwait cautious

WIRE:02/24/2000 12:14:00 ET
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KUWAIT(Reuters) - Kuwait, which has urged OPEC to extend curbs on oil output, gave a guarded response to a U.S. plea for higher production Thursday but assured its powerful ally it would not let high prices hurt the American economy.

"The magic word here for us all is the stability of the market for long term prospects," Oil Minister Sheikh Saud Nasser al-Sabah told reporters after talks with U.S. Energy Secretary Bill Richardson.

"We have a vested interest in the economy of the U.S. and we do not want to see any kind of adverse effect to that economy," said the sheikh, who served as ambassador to Washington during Iraq's 1990-91 occupation of Kuwait.

Richardson is on a tour of key producers to ask them to pump more oil and help lower buoyant world prices that have angered U.S. consumers and made oil a U.S. presidential election issue.

President Bill Clinton has said prices are very worrying and has urged OPEC to help bring the market into better balance.

In a joint Kuwait-U.S. statement, Kuwait reiterated a commitment to preserve market stability by continuing "to analyze ... data and production levels to prevent adverse oil price volatility and preserve world economic growth."

Sheikh Saud, who has spoken repeatedly in favor of extending the duration of output cuts beyond their end-March expiry, said that the late start of a news conference after the talks was "not an indication of disagreement," and repeatedly stressed agreement between the two allies.

$30 IS TOO HIGH FOR OIL, SAYS RICHARDSON,

Richardson later lashed out against "artificially high (oil) prices (which) eventually lead to inflation and stall economic recovery in Asia, slow economic growth throughout the world."

"High prices threaten world economic growth," added the secretary, who is due to push forward similar arguments when he flies to OPEC kingpin Saudi Arabia Friday and a later visit to key non-OPEC oil exporter Norway.

The joint statement said the two ministers agreed "that price volatility...was detrimental to both producing and consuming nations. It was also agreed that adequate oil supplies at reasonable prices is of crucial importance...."

Richardson said his discussions with OPEC producers were not aimed at dictating oil prices or manipulating energy markets.

But "we believe that our oil stocks are extremely... dangerously low. If you look at a 24 month period, that is an accurate refelction...The current oil stocks for us are much too low," said Richardson, who added that a U.S. presentation by experts was made to Kuwait to prove the argument.

Sheikh Saud, asked about his new cautiousness after months of demanding longer curbs, said: "I believe that the situation (production levels) has to be decided in March (when OPEC meets). It is an OPEC issue."

Summing up the joint statement and the outcome of his visit, Richardson said his mission was successful because:

"We agreed on three main points. One, price volatility harms every country. Secondly, we agreed that oil price levels should not jepordise economic growth. Thirdly, and you have heard the minister, Kuwait is committed to continue analysing production levels...to prevent harm to the world economy."

But Richardson stressed that the United States saw current prices as "too high ... $10 is too low, and $30 is too high."

He declined to say what level of prices he would like but added his visits to producers like Kuwait, Saudi Arabia, Norway and Mexico were "not to dictate prices or manipulate markets."

Richardson dismissed a question that his OPEC tour was part of the U.S. presidential campaign and his own political future.

"No. The United States position is that high oil prices harm economic growth not just in the U.S. but the world. There are no (internal) political considerations here," he said, adding the world's main economic powers had all expressed "concern over high oil prices."

Copyright )2000 ABC News Internet Ventures



-- Possible Impact (posim@hotmail.com), February 24, 2000

Answers

Don't you just wonder what concessions Richardson had to make, in order to get lower oil prices? (Or am I just being cycnical?)

-- Jo Ann (MaJo@Michiana.com), February 24, 2000.

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