U.S. President George W. Bush said on March 19th that he was encouraged by a pledge from Saudi Arabia not to allow crude prices to rise above $28 a barrel following OPEC’s decision on March 17th to slash production by 1 million b/d from April 1st.
Bush said that: “The good news in this decision was that the Saudi minister made it clear that he and his friends would not allow the price of crude oil to exceed $28 a barrel.” He indicated that OPEC was trying to balance market fundamentals.
“The OPEC nations are responding to decreased demand. World demand, they think, is going to decrease and therefore they responded with a million-barrel cut,” he said.
White House spokesman Ari Fleischer said that the new administration would take many factors into account when assessing OPEC’s decision to cut production.
He said that: “The president’s focus is on stability in prices. He wants the prices to be at levels that encourage American energy production but he also understands the importance of stability.”
The spokesman also indicated that the U.S. needed to take a long-term view of the energy situation and that increased American production could eventually help ease the problem.
“[Bush] wants to send America a signal that these are serious policies and serious issues that will require the ability of all people … to think long term. The president is going to focus long term and not speculate about fluctuations day to day.
He’s focused really on securing a long-term domestic strategy.” Bush also indicated that if gasoline price spikes occur this summer, he would not place blame on OPEC but rather on the lack of adequate refining capacity in the U.S.
His comments followed a briefing by Vice President Dick Cheney on the current U.S. energy outlook.
© 2001 Mena Report (www.menareport.com)