U.S. hits at collective attempts to move oil price
09:42 a.m. Nov 01, 1998 Eastern
CAPE TOWN (Reuters) - A U.S. official over the weekend reiterated Washington's opposition to collective attempts to influence oil prices, saying free markets were the best way of balancing producer and consumer needs.
Robert Gee, Assistant Secretary for Policy and International Affairs at the U.S. Department of Energy, told an energy conference the free play of market forces was preferable to group attempts to control price and production.
His restatement of U.S. policy to an audience including most OPEC oil ministers underlined long-standing American disapproval of the producer club's attempts to support petroleum markets by managing supply.
''The U.S. remains opposed to multilateral meetings that seek to influence oil price and production levels,'' he said.
''We do not endorse collective actions to control prices or production,'' he told the closed conference Friday. The text of his speech was released to reporters Saturday.
''When energy producers call for more predictability on oil prices, or for fair and just prices, what they really seek is higher prices,'' Gee said.
''Conversely, when oil prices are high, consumers call for stability, and what they really want is lower prices.''
''This uneasy relationship between producers and consumers can best be arbitrated in the market, where the full range of market participants, acting individually, makes energy allocation decisions and establishes prices.''
As a result, the United States had no view of a fair or just oil price and production level, he said.
The conference of more than 40 major oil importing and exporting countries included most ministers from the Organization of the Petroleum Exporting Countries.
OPEC has led two rounds of oil output cuts in association with some non-member producers this year to try to revive prices languishing a third below last year's levels.
Gee said the United States wanted to thank producer goverments that continued to maintain excess production capacity at a cost.
''We recognize the important role this excess production capacity can play in the enhancement of world oil supply security and sustainability.''
His remarks were apparently aimed at a handful of Gulf Arab countries including oil heavyweight Saudi Arabia that together retain more than two million barrels per day of extra capacity.
Copyright 1998 Reuters Limited. |
