The Wall Street Journal-20080117-Bush Cites Hope on Oil- Saudis Weigh Rise In Output- but They Make No Promises
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Bush Cites Hope on Oil; Saudis Weigh Rise In Output, but They Make No Promises
SHARM EL-SHEIKH, Egypt -- President Bush says "there's a hope" that, after his talks with Saudi King Abdullah seeking to restrain oil prices, OPEC "would be encouraged to authorize an increase in production," a White House official said.
After meeting with King Abdullah Tuesday, Mr. Bush said the king is "worried about high oil prices and how they can negatively [affect] the economies around the world," according to White House press secretary Dana Perino.
As the world's largest oil exporter, Saudi Arabia has major influence on the Organization of Petroleum Exporting Countries, which meets Feb. 1 to determine production levels. OPEC Secretary-General Abdalla Salem al-Badri said the oil cartel "will not hesitate to increase production if the market justifies this increase."
In response to Mr. Bush's complaints about high crude prices, Saudi Oil Minister Ali al-Naimi said Tuesday his country would increase production "if the need is there." But the Saudi minister appeared to hold out little hope of an immediate unilateral boost in output by Saudi Arabia, which has much of the world's surplus capacity. He also cautioned against "trying to predict what price . . . will cause slowing down" of the world's major economies, noting that other factors also appear to be at work in the U.S. economy's weakening.
Oil prices sank yesterday -- skidding to $90.84 per-barrel, the lowest price in nearly a month -- after the comments and after indications of growing economic weakness in the U.S., including a drop in December retail sales.
The International Energy Agency, in its January oil-market outlook, cautioned that demand and prices could fall because of weakness in the U.S. economy. The report also noted that "supportive factors" include China's growing demand for energy, shrinking supplies and tensions in the Mideast and Nigeria.
Mr. Bush's pleas to the Saudis for a boost in oil production appeared calculated for maximum political effect in the U.S., where the growing possibility of a recession has become a major worry for the White House. On Tuesday and again yesterday, the White House signaled early in the day that oil prices would be a major theme of Mr. Bush's visit in Saudi Arabia. That helped turn his lobbying into a significant story for morning commuters.
Democratic presidential hopeful Hillary Clinton chided the president. "President Bush is over in the Gulf now begging the Saudis and others to drop the price of oil. How pathetic," the New York senator said during Tuesday night's televised debate in Las Vegas. "We should have an energy policy right now putting people to work in green-collar jobs as a way to stave off the recession, moving us towards energy independence."
Mr. Bush's oil moves overshadowed the brief final stop of the president's trip yesterday in the Egyptian resort of Sharm el-Sheikh. He had lunch with Egyptian President Hosni Mubarak, a close ally whose recent record of political repression has made Egypt -- like Saudi Arabia -- a problem for Mr. Bush's "freedom agenda," which has sought to spread democracy through the Middle East as a way of dialing down extremism.
On his Mideast swing, Mr. Bush broadened the concept to include the theme of social justice. White House officials say they have found that justice resonates strongly with people in the region.
The change aligns the White House campaign more closely to the measures that many Arab countries -- flush with cash from oil -- are actually taking, through new spending on education, infrastructure and services.
In a brief joint appearance, Mr. Bush lavished praise on Mr. Mubarak, noting Egypt's "tradition . . . for a vibrant civil society," and adding, "I strongly believe that Egypt can play a role in the freedom and justice movement."
Mr. Bush also suggested he will need Egypt's help in hammering out the ambitious Israeli-Palestinian peace deal that he is seeking in his final year as president.
