U.S. energy chief calls for oil prices between $20 and $25 per barrel 6.41 a.m. ET (1156 GMT) November 18, 2000

By Anwar Faruqi, Associated Press

RIYADH, Saudi Arabia (AP) — World economies need stable oil prices between $20 and $25 per barrel, U.S. Energy Secretary Bill Richardson said Saturday at an energy summit bringing together oil-producing and oil-consuming nations.

Richardson told reporters that neither producers nor consumers are entirely to blame for prices that have soared to more than $30 per barrel — heights unseen in a decade.

Demand has been "excessively high,'' he acknowledged. But, he added, "there is a supply problem. Crude stocks are much too low.''

"We believe that $10 a barrel of oil is too low and $30 is too high. We would ideally like to see a price between $20 and $25,'' Richardson said. "High prices are harming several world economies. What the world needs are stable oil prices.''

Richardson also said he hopes the Organization of Petroleum Exporting Countries will not decide to cut production at its January meeting. The United States would want increases considered, he said.

Because of fears within OPEC that prices will fall with a drop in demand for heating oil in the spring, industry analysts and some members of the cartel have said it may cut production next year.

High oil prices have sparked protests in consumer countries, most notably in Europe. Protesters complain that rising prices and a strong U.S. dollar are putting them out of business. Producers, meanwhile, argue that fuel taxes — which can account for 60 or 70 percent of the price of car fuel in some consumer nations — should be cut.

Richardson said the United States is still assessing whether to release more crude oil from its strategic reserves. President Clinton authorized the release of 30 million barrels of crude from the reserves in September, trying to ensure adequate supplies of heating oil for the winter.

The pressure of high prices, Richardson said, has prompted the United States to look for alternative energy sources closer to home.

"We are trying to diversify our sources, especially in our own hemisphere,'' he said. "When high prices become a factor, new sources become more attractive.''

Loyola Depalacio, vice president for transport and energy at the European Commission, echoed Richardson's call for stable, lower oil prices. However, she said the European Union is not ready to release oil from its strategic reserves and would not ask OPEC to increase production in January.

Also Saturday, the International Energy Agency released a report at the conference saying investment in OPEC countries will be needed to ensure that those nations can produce enough oil to meet demand 20 years down the road. Demand is expected to grow from 75 million barrels per day in 1997 to 115 million barrels per day in 2020, the report said.

"We do not expect a global 'supply crunch,' but getting these resources onto the world market will demand large and sustained capital investments, particularly in Middle East OPEC countries,'' the IEA said in its World Energy Outlook report. It did not give a specific figure.

The International Energy Forum, which continues through Sunday, includes OPEC oil ministers, representatives from nearly 50 countries and officials from the European Union, the World Bank and other international institutions.

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-- Martin Thompson (mthom1927@aol.com), November 18, 2000