A serious review must be made of world oil markets
to end volatility that threatens the international economy, U.S.
Energy Secretary Bill Richardson said Tuesday.
Output should be increased and the market allowed to determine
the level of prices and supply, Richardson said after meeting with
Venezuela's energy minister, Ali Rodriguez.
Richardson noted that world production is currently 73 million
barrels of oil a day, against consumption of 75 million barrels.
"We cannot sustain this imbalance between supply and demand
without risking repercussions for the world economy," he told a
news conference. "We believe that greater equilibrium between the
production and consumption will help end this volatility."
During a 12-day tour of Europe and the Middle East, Richardson
said he has obtained agreements from Kuwait, Saudi Arabia, Norway
and Venezuela to reevaluate market conditions and production
Signs that the Organization of Petroleum Exporting countries
will extend its production cuts beyond March have helped push the
price of oil to around $30 a barrel, compared with $10 about a year
Richardson said stocks of oil and oil products are
"substantially lower" than in 1996. In the United States, stocks
of gasoline are down 15 percent from a year ago "not a good
statistic," he said.
"We believe that current low stocks can affect inflation,"
But he said the United States won't intervene to determine the
price of oil and added that artificial constraints aren't good for
the oil market. The United States also will not pressure producers
to increase output to ease high oil prices, he said.
Rodriguez said OPEC members are committed to market stability
and will take the "appropriate decision" on whether to raise
output or extend output cut agreements from April 1.
He refused to elaborate on what that decision would be, though
he told Dow Jones Newswires on Monday that he expected OPEC would
likely wait until the second half of this year to increase output.