Groveling For Oil and Dollars

Is that it? Has the lack of a US policy on reducing dependence on foreign oil brought us to these immortal words by George Bush,

"Oil prices are very high, which is tough on our economy."

These are the words that will be left in the ears of our Saudi friends? Combine this with US bankers looking for capital in all the wrong capitols and the world sees a very pathetic reduction in US power and prestige.

Common sense should have warned us that a policy that gutted US manufacturing and disregarded the worldwide trends in energy supply and demand would be trouble. Add an unsustainable investment in housing and we now have the results, the US begging and borrowing for oil and capital. Not pretty.

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Cutting up.

Saudis tightlipped on Bush oil appeal
By Daniel Dombey in Riyadh and Javier Blas in London Financial Times
January 16 2008

Ali Naimi, Saudi Arabia's oil minister, yesterday said that US president George W. Bush had "every right" to call for increased oil production to damp the effect of $100-a-barrel prices on the US economy. But Mr Naimi would not be drawn on whether his country or the Organisation of Petroleum Exporting Countries would favour such a step.

Opec, the oil cartel, will discuss its production policy on February 1 in Vienna after leaving unchanged its output ceiling in December in spite of record oil prices.

Responding to remarks by Mr Bush, who is staying with Saudi Arabia's King Abdullah, Mr Naimi said: "Presidents and kings have every right, every privilege, to comment or ask or say whatever they want." He added: "The concern for the US economy is valid but what affects the US economy is more than the price of oil." Venezuela and Iran have already said the cartel should not increase its output. Mr Naimi was tightlipped about its preference ahead of the Opec meeting, only saying: "We will raise production when the market justifies it."

He warned oil demand could rise this year as little as 900,000 barrels a day, below the US government estimate of a 1.6m b/d rise, suggesting a cautious approach. Brent IPE oil yesterday fell nearly $2 to $90.98 a barrel on renewed fears that the US economy is heading into recession.

Earlier yesterday, Mr Bush told a meeting of Saudi entrepreneurs that he was planning to raise the issue with King Abdullah last night. He added: "Oil prices are very high, which is tough on our economy."

White House officials said the previous day they did not know whether Mr Bush would address the topic with King Abdullah. But the high oil price is a sensitive political topic ahead of the presidential elections.

The Bush White House has been far less vocal than the Clinton administration in asking Opec to increase its production, partly as it acknowledged that the cartel, with the exception of Saudi Arabia, is pumping at full capacity.

Riyadh has often ignored US calls for more oil supply, although it lobbied other Opec members to raise production in September.

Mr Naimi blamed speculators for adding an extra $20-$30 a barrel to the price of oil.

Chakib Khelil, Opec president and Algeria's oil minister, warned that Opec would have to be careful before raising its output. "The spectre of a recession in the world economy is still looming over the oil market," Mr Khelil was quoted as saying by the Algerian news agency.