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To: Eashoa' M'sheekha who wrote (49358)	2/19/2000 4:35:00 PM
From: Eashoa' M'sheekha	Read Replies (1) \| Respond to of 116756

In The.." What's Wrong With This Picture ". News:2 Richardson: High Oil Prices Threaten Economy By Susan Schneider MEXICO CITY (Reuters) - U.S. Energy Secretary Bill Richardson warned on Saturday that higher oil prices could threaten world economic growth. After talks with Mexican counterpart Luis Tellez, Richardson said the United States is ``clearly' looking for increased oil output. ``Our message is that elevated crude prices have the potential to retard the world economy' by fueling inflation, which would usher in an interest rate rise, Richardson told reporters. Richardson's energy offensive comes at a critical time in world oil diplomacy. Mexico, Saudi Arabia and Venezuela -- the architects of last year's pact to trim output -- are just days away from a March 2 meeting that could determine the fate of oil cutbacks. Yet the U.S. secretary appears to already have the key producers in his corner. Mexico's Tellez said on Friday his nation is eyeing a small increase beginning April 1, and Venezuela and Saudi Arabia have both said they are prepared to relax the curbs on output. ``The official position of Mexico is that of stable, high prices, but prices that allow for the growth of the world economy,' said Tellez. The March 1999 agreement among OPEC and non-OPEC producers, including Mexico and Norway, has spurred a three-fold rise in prices, sending them thundering past $30 a barrel in recent weeks for the first time in nine years. Saudi Arabia has suggested that the ideal price would float between $20 to $25 a barrel, a target that Mexico's Tellez lent support to on Friday. Richardson, however, declined to provide any figures on an ideal price or what he would see as an adequate jump in production, saying the market should dictate prices. And, to foster the forces of the free market, Richardson added that he did not want to tap the United States' Strategic Petroleum Reserves in order to lift prices, noting that they are designed solely for supply emergencies. ``We didn't intervene when oil was at $10 and we won't intervene at $30,' Richardson said. The U.S. Strategic Petroleum Reserve, which President Clinton said he had not ruled out using to help ease prices, holds 569 million barrels of oil. No Pressure With many experts speculating that the United States is trying to strong-arm producers -- especially Mexico -- into ramping up production, Richardson again denied that the United States is pressuring nations to back its stance. ``I didn't come to pressure anyone, only to provide the U.S. viewpoint,' Richardson said. Analysts said this week that Mexico is a key pressure point for the United States because the southern nation relies heavily on its neighbor for export revenue. About 80 percent of Mexico's exports are bound for the United States. The next stop on the oil diplomacy tour is the Middle East, where Richardson is slated to meet with officials from Kuwait, Saudi Arabia and other countries. He will also meet with Norway during the 10-day mission. The brief talks between Tellez and Richardson, who also stopped off to see his mother and sister in the nearby city of Cuernavaca, included leaders of the business community, key legislators and opposition parties, Tellez said. The inclusion of Congressional officials and business executives came after the Mexican Energy Minister endured sharp attacks from Congress and opposition parties for selling out Mexico's national interests. One such remark came from Cuauhtemoc Cardenas, the leader of the opposition Party of the Democratic Revolution (PRD), who this week called Tellez's backing of supply ``nothing more than a policy of submission.' Mexico, Saudi Arabia and Venezuela -- the three top foreign suppliers of crude to the United States -- will also join the rest of OPEC at a March 27 summit in Vienna.

To: Eashoa' M'sheekha who wrote (49358)	2/20/2000 11:09:00 AM
From: goldsnow	Respond to of 116756

U.S. Pushes for Lower Oil Prices Saturday, 19 February 2000 M E X I C O C I T Y (AP) ENERGY SECRETARY Bill Richardson received no promises and little sympathy from Mexico on Saturday, as he began a trip to lobby oil-producing countries to lift production limits that have sent heating oil prices soaring in the United States. Mexican officials said they shared Richardson's concern about inflation, but would respect a "gentlemen's agreement" with other producers not to increase output before April 1. Richardson told a news conference after the meeting that U.S. officials were worried about production levels and the low level of oil inventories. "The high price of oil could contribute to inflation ... and diminish growth in the world economy," Richardson said. But he was quick to add that it was unlikely to cause a recession "like in the 1970s or 80s" that caused shock waves in U.S. politics. Richardson warned that U.S. inflation could hurt Mexico's own economy. Almost 85 percent of Mexican exports go to the United States. Mexico also depends on U.S. tourism and remittances sent home by workers in the north. Mexican Energy Secretary Luis Tellez said he wanted "high, stable and profitable prices, but ones that don't hurt the world economy." Both Richardson and Tellez were walking a tightrope: Richardson didn't want to set off a nationalist backlash here by seeming to threaten Mexico, and Tellez has been ridiculed in the local press this week for suggesting that oil prices should come down to about $25 a barrel. The price of oil stabilized Friday at slightly under $30 a barrel. Tellez's statements were ill-received in a country where poverty is widespread and where the government relies on oil for about a third of government income. "I absolutely don't think prices are too high. Mexico has had prices of as much as $36 per barrel in the past," said opposition congressman Sergio Osorio, president of the congressional Energy Committee, who also took part in the meeting. "This is a question of national sovereignty, because Mexico's own interests come first," Osorio said. Oil-producing countries agreed to cut output by 5.2 million barrels per day after prices plummeted to below $10 per barrel in 1998. Some U.S. politicians have urged President Clinton to release strategic oil reserves to the market, something Richardson said he opposes and which Osorio said would only temporarily depress prices. "The pressure is strong, but politics should not influence (oil) prices," Richardson said. "The market should decide prices." Neither Richardson nor Tellez would set a figure on how much they want production increased or what they think a reasonable price would be. Richardson said that was for the producing countries to decide in meetings next month. It appears likely that producer nations may agree to boost output by about 1.7 million barrels per day, based on recent statements by Venezuelan and Saudi officials. Richardson is scheduled to continue on to Venezuela, Saudi Arabia, Kuwait and Norway to lobby for increased production. Sympathy for his appeal is likely to be limited in countries which have had to slash government spending in previous years because of low oil prices. "Last year when prices were as low as $7 or $8, we didn't see them (the Americans) coming around," Osorio said. "I told Mr. Richardson very clearly that ... only on this basis, of equality, can we understand each other."