US reaches agreement on oil stability

Posted by Oil Tycoon

January 21, 2008

US Energy Secretary Samuel W. Bodman and his Saudi counterpart Ali al-Nuaimi agreed on the need to maintain stability in oil markets.

The two men discussed “the situation in the world oil markets, with respect to supply, demand and the inventory level, while there has been an agreement over the importance of maintaining balance and stability in the market,” according to a statement by the Saudi government.

The Saudis displayed the oil-rich kingdom’s plans to increase its output capacity of crude oil, and spoke of the need to increase refining capacity locally and internationally.

On Thursday, Mr Bodman said he was touring oil-rich Gulf Arab states to press them to pump out more crude.

“In my own view, there is some evidence to suggest that the supplies are less than what we would like to see them,” he said.

“The reason that the price of oil is increasing is in part due to the fact that there is a perceived shortage,” Mr Bodman said, echoing remarks by US President George W. Bush.

During a two-day visit to Saudi Arabia this week and talks with King Abdullah, President Bush voiced hope that the OPEC oil cartel will increase output to combat high world prices.

Ministers of the 13-member Organisation of Petroleum Exporting Countries, which pumps about 40 per cent of world crude, will gather in Vienna on February 1 for a special policy-setting meeting.

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