Morgan Stanley
India | Friday, 29 August 2008
Global News
All IBTimes

Bush asks Saudis to increase oil production

By Jennifer Loven
Font Scale:
Posted 13 May 2008 @ 11:57 am GMT

President Bush is appealing to oil-rich Saudi Arabia to increase production just as oil prices have hit another record high.

As U.S. consumers cope with rising prices at the gas pump, Bush is on a one-day visit to Saudi Arabia for another burst of diplomacy with King Abdullah.

When the two met here in mid-January, the president asked Saudi Arabia to raise production to ease high prices at the pump. Bush got a chilly response to his plea. The kingdom said it would increase production only when the market justified it, and that production levels appeared normal.

Oil prices climbed to a new high Friday, above $127 a barrel. At the pump, gas prices rose to a national average of $3.78 per gallon, according to a survey of stations by AAA and the Oil Price Information Service.

When Air Force One landed in the Saudi capital on Friday, the president got a red carpet welcome on the tarmac and was warmly greeted by Saudi leaders as a military band played the U.S. national anthem, slightly off-key.

Bush was spending the day with Abdullah at his horse farm outside Riyadh, talking mostly out of public view over three tea services and two meals.

After their first sessions Friday, Bush and Abdullah presided over a ceremony formalizing new cooperation between the kingdom and the United States on a range of topics: combating nuclear terrorism and weapons proliferation, protecting infrastructure and developing civilian nuclear energy in Saudi Arabia.

The White House says the president's visit is intended, in part, to celebrate 75 years of formal U.S.-Saudi relations. But the rising price of oil undoubtedly will overshadow the talks.

Bush acknowledges that raising output is difficult because the demand for oil particularly from China and India is stretching supplies. Besides, any production hike might not lower prices that much. Some economists say those prices are being driven up by increased demand, not slowed production.

When Bush first ran for president in 2000, he criticized the Clinton administration for high fuel prices and said the president must "jawbone" oil producing nations and persuade them to drop rates. At that time, oil was nearing $28 a barrel.

IBTimes RSS
E-Newsletters : Enter your Email for Fast News & Opinions
advertisement
Top Stories on Global News
advertisement