U.S. sees oil output hike

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U.S. sees oil output hike Energy Secretary Bill Richardson is upbeat OPEC will raise oil output March 19, 2000: 3:15 p.m. ET

WASHINGTON (Reuters) - U.S. Energy Secretary Bill Richardson said on Sunday he was confident OPEC would raise oil output but not sure the increase would be large or fast enough to replenish depleted U.S. stocks quickly. A sharp rise in oil prices has set off a heated political debate in the United States. Richardson was leaving on Sunday for a final round of energy diplomacy ahead of the March 27 meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna. "I'm confident that OPEC will increase production," Richardson said on the CBS show "Face the Nation." "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. We need a sizable increase and we need to move that oil into the world market right away," he said. The Clinton administration wants OPEC to increase output to close a two million barrel-per-day gap between world demand and supply. Oil prices have tripled in the past year to above $30 a barrel and the U.S. pump price for regular unleaded gasoline is above $1.50 a gallon in many communities, with predictions it will reach $2 a gallon this summer. President Bill Clinton proposed on Saturday creating a home heating oil reserve for Northeast states to prevent future shortages in the region and announced other steps to cut U.S. dependence on international oil. The measures will not immediately replenish dwindling U.S. petroleum stocks or lower gasoline prices this spring and summer, but are part of the administration's long-term energy policy. Richardson said the United States was keeping all its options open and had not ruled out tapping the U.S. Strategic Petroleum Reserve -- a 569 million-barrel emergency oil stockpile -- to increase supply.

Richardson said the administration would hold off on deciding whether to release oil from that reserve until after the OPEC meeting. "The president has not ruled that option out at all," Richardson said. "Right now our energy diplomacy is working." Richardson said he had had "encouraging" talks with the Saudi oil minister on Saturday in California. Saudi Arabia is the largest U.S. oil supplier and most influential OPEC member.

Leading oil producers Mexico and Venezuela agree production should rise, he added. Richardson sets out on Sunday for a one-week trip to hold talks with oil ministers from OPEC members Algeria, Indonesia, Nigeria and the United Arab Emirates.

Richardson said a key component of U.S. energy policy is to boost domestic production. U.S. oil output last year was at the lowest level in half a century because it was cheaper to buy international oil than to drill for it domestically.

Richardson said the administration does not look favorably on drilling off Florida's coast or in new areas in California waters. He also said they would not support drilling in Alaska's protected areas because those are environmentally sensitive. "We don't need to do that," he said.

http://cnnfn.com/2000/03/19/economy/energy_wg/

-- Martin Thompson (mthom1927@aol.com), March 19, 2000


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