Hurricane Bear Moderator
- Sep 1, 1997
- Reaction score
Cartel Cites Lagging U.S. Economy As Reason For Keeping Production At Same Level
OPEC will not put more oil on the global market, citing the stumbling U.S. economy as the reason for slackening demand in the near future.
The Organization of Petroleum Exporting Countries announced Wednesday that it decided not to pump more - or less - oil right now because crude supplies are plentiful and demand is expected to weaken in the second quarter.
OPEC spokesman Ibrahim Hussein said America's economic problems were a key factor in its decision to hold off on any action.
Saudi Arabia, the No. 1 producer and by far the most influential member of the Organization of Petroleum Exporting Countries, also said it saw no reason to change output targets - despite prices hovering near US$100 a barrel and a rebuke by U.S. President George W. Bush.
"Understand the consequences of high energy prices," Mr. Bush said Tuesday after meeting with King Abdullah II of Jordan at the White House.
"I think it's a mistake to have your biggest customers' economies slowing down as a result of higher energy prices," he added.
Mr. Bush's scolding underscored fears that high oil prices - which earlier this week hit a new inflation-adjusted record of nearly $US104 a barrel - are slowing global economic growth and risk nudging the shaky U.S. economy into recession.
Japan, the U.S. and other major industrialized nations have urged OPEC - which satisfies about 40 percent of the world's demand for crude - to bring more oil on the market as a means of pulling down prices.
But the group resisted, suggesting it would hold off to see what happens with supply and prices this spring.