OPEC Faults U.S. As Oil Hits New High

Cartel Blames U.S. Economic "Mismanagement," Not Lack Of Supply, For Pushing Crude Past $104 A Barrel

(CBS/AP)  OPEC on Wednesday accused the U.S. of economic "mismanagement" it said is pushing oil prices to new record highs, rebuffing calls to boost output and laying the blame at the feet of the Bush administration.

Oil prices surged past $104 a barrel for the first time after the OPEC announcement and the release of a U.S. government report showing a surprise drop in crude oil stockpiles.

The 13-nation Organization of Petroleum Exporting Countries said it would maintain current production levels because crude supplies are plentiful and demand is expected to weaken in the second quarter.

OPEC President Chakib Khelil told reporters the global market is being affected by what he called "the mismanagement of the U.S. economy," and that America's problems were a key factor in the cartel's decision to hold off on any action.

"If the prices are high, definitely they are not due to a lack of crude. They are due to what's happening in the U.S.," Khelil said. "There is sufficient supply. There's plenty of oil there."

Khelil's comments came one day after President George Bush lashed out at the organization, warning Tuesday: "I think it's a mistake to have your biggest customers' economies slowing down as a result of higher energy prices."

White House spokesman Dana Perino said Wednesday that Mr. Bush was "disappointed" OPEC didn't do more to rein in prices, which some say are pushing the U.S. economy into recession.

Japan and other major industrialized nations have also urged OPEC - which supplies about 40 percent of world demand for crude - to bring more oil on the market to pull down prices.

OPEC, pointing to slackening demand in the second quarter, suggested that it will hold off to see what happens with supply and prices this spring.

"Why do we need to take any new measure if the health of the market that we follow for our policies is sound?" the pan-Arab newspaper Al Hayat quoted Saudi Oil Minister Ali Naimi as saying.

Naimi told reporters in Vienna that his country is pumping roughly 300,000 barrels a day over its quota and is selling every drop "day in, day out" - an upbeat assessment.

Analyst John Hall, of John Hall Associates in London, said OPEC probably should have added oil to the market as Bush had asked.

"But in this time of intense geopolitical tension, it would be difficult for Saudi (Arabia) or any other producer to acquiesce simply because President Bush had asked them to," he said. "In the short term, any true respite for the consumer is still out of reach."

Although OPEC opted not to intervene, it did pledge to maintain "constant vigilance" over the market.

Khelil said he and OPEC's secretary-general were authorized to call an extraordinary meeting or hold phone consultations "at any time, depending on the pressures on the market" - an apparent gesture to ease global economic jitters.

There had been some speculation that OPEC might actually cut production - a move that would drive prices even higher, along with profits for cartel members - but Khelil said a cut was not discussed at Wednesday's meeting. He said OPEC had no plans to meet again before its next scheduled conference in September.

Earlier in the week, price hawks Venezuela and Iran had indicated they planned to push for less production.

Khelil said crude stocks were well within their five-year average and the 13-nation group was not inclined to either boost or reduce its current output of about 32 million barrels a day.

[olebd]

We have to make more of an effort to stop using their product.

Why don''t we bring back returnable/reuseable glass bottles for sodas and milk, maybe even water? Wasn''t that a great way to recycle instead of all the disposable plastic bottles today? I think soda tasted better in the big, thick glass bottles anyway.

I hope I live to see the day when these basstards are stuck with barrels of useless oil.

[runningralph]

There is no incentive for oil producers to increase supply or lower prices. The average American uses 9 times as much energy as the average non-American. Global warming activists say too much fuel is being burned. If Americans cared about high fuel prices they would not drive large vehicles, overeat, over consume. They would be conservative and live in cities instead of suburbs and use public transportation. If Americans really cared they would have built all the cities on the model of New york City. Millions living in a few sqaure miles, utilizing a really good transportation system. That''s what has kept New York successful. Conservative principles can prevent collapse. Liberalism causes collapse.

[olebd]

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Posted by lisa8404 at 09:30 AM : Mar 05, 2008

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Is this the new sales technique since telemarketing has been almost eliminated?

[element51]

There is no incentive for the oil producers to increase production. As long as Americans continue to drive vehicles that get 8 to 10 miles to the gallon, build houses that are 3 to 4 thousand square feet and make no effort to really develop alternative fuels and allow the big oil companies to make obscene profits nothing will change. It should be obvious to everyone by now that EVERYTHING is tied to oil production and prices are going to continue to rise as oil prices go up. We are caught in a vicious circle here and I just don''t see any solution. Maybe when a gallon of milk hits 6.00 and a loaf of bread hits 5.00 people will finally get the idea. If you streach a rubber band far enough it will snap and I think we are streached pretty thin right now. How long till the economy snaps?

[element51]

runningralph...As I started to read your post I thought, hay,this guy has some good points. I totally agreed with what you said...till I got to the last sentence. Whether one is liberal or conservative is totally irrelevent here. Both are suffering in the same ways. Why was it necessary to throw all the blame on the liberal side? As I see it, there is pleanty of blame to go around and both sides share equally. Instead of trying so hard to place blame maybe it would be better to work together to try to find some answers to this problem. Your post shows that you have the ability to look at the problem in an intelligent way so put that intellect to use to find some solutions. All in all though it was a good post

[easeup-2009]

"Maybe when a gallon of milk hits 6.00 and a loaf of bread hits 5.00 people will finally get the idea. If you streach a rubber band far enough it will snap and I think we are streached pretty thin right now. How long till the economy snaps?

Posted by element51 at 09:50 AM : Mar 05, 2008"

I don''t know if you''re old enough to remember the oil embargo of the 70''s. Prior to that, everyone drove in cars that were about 2 blocks long. When gas prices went through the roof the compact car emerged, as demanded by the marketplace. I don''t think we''ve reached our pain threshold yet--maybe $5....maybe $6 gas will force changes in usage habits & car design.

[bobnjersey]

[The average American uses 9 times as much energy as the average non-American ... If Americans cared about high fuel prices they would not drive large vehicles, overeat, over consume ... They would be conservative and live in cities instead of suburbs and use public transportation. If Americans really cared they would have built all the cities on the model of New york City. Conservative principles can prevent collapse. Liberalism causes collapse.]
[Posted by runningralph at 09:15 AM : Mar 05, 2008]

people generally dont use a single criteria to decide how (or where) to live their lives.

the world is not black and white ... but rather infinite shades of gray inbetween.

[drivelphobe]

The gas shortage of the 70''s was a warning. Based on the last number of your license plate, odd or even, you were able to purchase gasoline every other day, if the station had any left. Prices didn''t matter, it was a question of supply. Lines for gas would begin the night before the stations even opened.

Here we are, thirty years later, even more dependent on the oil from the animals living in third world countries. It has to stop.

Alternate fuels will not be developed until the last drop of oil is gone. The oil industry has too much money, power and influence.

The only thing that we as individuals can do, is try to use less gasoline, make vehicle selections that are more fuel efficient, and vote out anyone who seems to go with the flow of the oil industry.

The thought of the middle-eastern cave people, wallowing in wealth due to our addiction to their oil, disgusts me beyond belief. If it weren''t for oil and our dependence, these people would have life expectancies of 35 years, live in dirt and run around cutting off each other''s heads.

There''s nothing to be done really. We each have to take care of ourselves since our government won''t do anything. It''s just like the open border. No one cares. Will Farsi soon become as prevalent and imbedded as Spanish? How sickening. I''m happy I''m old and don''t have that much more time to live through this garbage.

[runningralph]

element51,
Thank you for your compliment. I do stand by conservative principles and I see in your previous post that you do as well. The US has been liberal over most of it''s history. The last relatively conservative administration was Eisenhower and even Ike did not act conservatively when he promoted the interstate highway system. He did that so the Army could move around more easily. He should have promoted a more useful and efficient rail system for military use. Since then liberalism has run amuck in the US. China is more conservative than the US.

[oscarez]

Crude Oil prices ranged between $2.50 and $3.00 from 1948 through the end of the 1960s. World production of crude oil was 35 million barrels per day in 1966 and 75 million barrels per day in 2006. Crude oil is running out at a much higher rate than any one though possible. To add to the problem all raw materials are being depleted at a much higher rate. The human race has a lot more to be concerned about than just crude oil.

[bm6005]

Drive less, pull that motorcycle out of the garage, walk more, don''t drive someplace to bike, walk or run. Drive down your consumption, that''s what I''m doing! America could do good by walking some of our fat a sses off!! How would you people have made it thru WWII?

[bm6005]

Conservative principles can prevent collapse. Liberalism causes collapse.
Posted by runningralph

What a MORON "running" off at the mouth. Conservative principles = consume more, there is no problem!

[samrensho]

I''m sure Shrub and Shooter are thrilled at that. More profits, more profits. GW can go kiss uncle Bandar again and count his profits in Crawford.

[payasyougo]

"The oil industry has too much money, power and influence."
Statements like this are so misleading. And then there are statements closer to the point:

"The only thing that we as individuals can do, is try to use less gasoline, make vehicle selections that are more fuel efficient,"

If oil companies have any power its becaue the american consumer chose gas guzzling SUVs over fuel efficient vehicles for so many years. Now we see the long term results.

This problem will once again fix itself as we make the move to more fuel effiecient vehicles over the next two to three years.

You can ignore the claims that China and other developing nations are coming to the tap and focus solely on what your cost per mile is. Buy a fuel efficient vehicle that gets twice the mileage of what you now drive and you''ll cut your fuel cost in half.

[bobnjersey]

[The last relatively conservative administration was Eisenhower ... Since then liberalism has run amuck in the US. China is more conservative than the US. ]
[Posted by runningralph at 11:10 AM : Mar 05, 2008]

so what persuasion was the group from the last seven years ... and the ones from 1980 thru 1992?

maybe they were too compassionate for your liking?

[runningralph]

bm6005,
I may not be the smartest person around, but I know what the word conservative means. But you have twisted it around backwards. Look it up in the dictionary.

[mollydtt]

I''m sorry to go against the grain, but if Americans could get past the idea of driving a car every time we need to go somewhere, demand would go down, there would be less traffic jams, and we might even (gasp!) walk a block or two. I would gladly take public transportation if it were more widely available, but for now, our consensus is to just pave over every piece of open land, rather than add light rail or more routes. When the last drop of oil is produced, it will be very expensive.

[marcosis78]

I agree. Or you can have more environmentally safe cars. Toyota''s standards are far ahead of any American car and they are whining and crying that it would take 10 to 12 years to make better cars like Toyota, what BS. Its the laziness of the auto industry to want to do anything.

[runningralph]

bobnjersey,
The US government may have been compassionate but it was not conservative. The two aspects are not mutually exclusive, but liberalism and survival are mutually exclusive. Conservatism is a way survive.

[skyk-2009]

Didn''t Sir Lies-A-Lot tell us he could get his good friends to increase their output when he was running for the office he now holds.

[skyk-2009]

Conservative principles can prevent collapse. Liberalism causes collapse.
Posted by runningralph

What a MORON "running" off at the mouth. Conservative principles = consume more, there is no problem!


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Posted by bm6005 at 11:50 AM : Mar 05, 2008
+ report abuse

I wonder what History Book this poor fool is reading? Certainly isn''t on on AMERICA...at least not one that I''m aware of. The reverse is in fact HISTORICALLY Accurate. In EVERY collapse this nation has suffered that has been a Conservative at the helm. I EVERY case when we have been pulled OUT of those collapses it has been Liberals at the helm.

[Gary Kempf]

We don''t need OPEC, The moron commander, Bush is sitting on 1.5 Trillion barrels of oil in Colorado. In 2005 Congress approved funding for a small oil company to extract oil from shale. They were able to extract 70,000 barrels of oil a day at $25.00 a barrel. They were shut down after they proved it could be done. They can reverse this *** of high oil prices. They are making to much money to do the right thing. Our government has been sitting on this oil since 1910. It was to expensive to extract until now...

[walt1944-2009]

The Great Emperor Bush is upset (again, it''s been a bad week for the Great Emperor) that OPEC will NOT pump more oil out of the ground and sell it to the US(SA).

Apparently, the members of OPEC would much rather sell their oil for Canadian dollars, yen, or Euros rather than worthless US dollars. Fearing that the Great Emperor Bush Depression is coming fast, OPEC does not want to be caught with tons of worthless paper on its hands, despite assurances by the Great Emperor that THERE IS NO RECESSION(???!!!).

However, the Emperor has proposed that in lieu of the US dollar, OPEC might consider the Emperor''s own currency, the "Bushie", instead. The members of OPEC reportedly burst out laughing and showed the Emperor which way the door swings!

SIG HEIL, BUSH!!!!
sig heil, McCain????

[neoconslayer]

Maybe Bush could drop by Saudi Arabia, crawl like a dog through the blood of people slaughtered by Saudis (like all those Americans who died on 9/11), and lick dried fecal matter from the King''s pimpled, hairy butt for us.
You know, like they show in the porn he watches.

[phldml]

Don''t blame Turkey, Don''t blame Afganistan, Don''t blame tension in Bagdad, Don''t blame anyone but OPEC ! GREED for lack of a better word is all that it is ! Blame OPEC and BLAME our Govenmet for letting it happen. Remember Taxes on a 3.50 gallon of gas are more than Taxes on a 2.00 gallon of gas !

[joyous88]

Blame OPEC? What, are you stupid?

How about we blame to USA being in debt for four trillion dollars to everyone on the planet and the idiotic republican conservative trickle down economic theory, which is a complete CROCK,

an idiot theory combined with and idiot president equals diaster,

and lets not forget to thank the mindless christian and republiCon voters who gave us this mess.

[olebd]

If Bush were smart, he would at least pretend like we are putting efforts in place to open our own taps on U.S. soil to make the OPECkers squirm.

[homjett]

I would think that the MSM ought to take this news an start blaming the Congress for sitting on their collective hands an start allowing this country to build refinere''s, more drilling wherever there is oil, open up the wells that are now closed to pumping, an tell the OPEC where to go. They are blackmailing us, an everyone sits around a blames the President. Had we done what he proposed a few years ago, we would be alot closer to independence. Lets face it, we cannot continue with biofuels that push food prices up. I find it interesting that the folks running for the Office of President, happen to be the ones that could do something about most of our problems. Where are the Real Reporters when the country needs them????

[Gary Kempf]

I find it interesting that the folks running for the Office of President, happen to be the ones that could do something about most of our problems. Where are the Real Reporters when the country needs them????


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Posted by homjett at 02:19 PM : Mar 05, 2008

This is why we need answers from those running for president to answer this question before we elect them. This is why people need to go to there web site and ask them directly......

[bookwerm314]

What is NOT discussed in this or other "news" articles is that there is SERIOUS questions if OPEC CAN increase output.. there is evidence supporting the view that additional output from OPEC is NOT available, major infrastructure needs to be added, more drilling done, more fields found, and that has NOT happened. Really. We are at or near "Peak oil".. I think that is coming faster than we think due to the increasing consumptions by the 3rd world economies as they catch up to the 1st world.. FYI, Oil has not gone up much at all.. mostly it is the drop in the US $$.

[bookwerm314]

Oh, for those talking about getting oil out of shale.. it isn''t how much oil there is.. it is how much energy it takes to GET the oil.. Shale is barely over break even when you include profits costs etc... so it is NOT the dream you think it is.. as the energy to get it out is a ratio of the energy in the ground, the profit you can make might go up as the barrel price does, but you will burn 100 gallons of oil to get 110? NOt good for C02! NO, the real solution is to make energy the old fashioned way.. EARN it.. wind, solar, all of those are "pay as you go" approaches, WON''T run out.

[oilfix]

Because government regulators allowed the big banks & wallstreet commit financial fraud and pump credit markets and are now trying to protect the same fraudsters from taking their due losses, investors see the system as corrupt and look for safe havens for their money...commodities!!! This is why food and energy prices recently went ballistic and will return to normal when trust in financial markets is restored.

[watcher269-2009]

WHAT? Bushit/Chainy can''t get the OIL Pushers to cut their prices? WOW - What a surprise.

[liberalme]

OPEC President Chakib Khelil told reporters the global market is being affected by what he called "the mismanagement of the U.S. economy," and that America''s problems were a key factor in the cartel''s decision to hold off on any action.


If the prices are high, definitely they are not due to a lack of crude. They are due to what''s happening in the U.S.," Khelil said. "There is sufficient supply. There''s plenty of oil there."

Thus to further pi$$ of the world at America--sounds like mis-management of our banking system and the Bush cartel (wanna be).

All Americans are being punished for the greed of these two entities and the war in Iraq isn''t helping!

If Bush were smart, he would at least pretend like we are putting efforts in place to open our own taps on U.S. soil to make the OPECkers squirm.

Posted by olebd

Oh thou givest him too much credit---Bush can''t even spell the word "smart".

[rf35]

I find it ironic that one of the defining characteristics of a liberal is a desire to conserve!

Anyway, once people get tired of paying the extortionist prices for gas, the renewables will start taking over and we can finally tell the Muslim terrorist group called OPEC to kiss our red, white, and blue a-sses. Honda and BMW are both marketing hydrogen fuel cell cars. More import auto makers are sure to follow (sadly, we all know the American companies will be the last to get on board, as usual). Infrastructure will follow as these cars start hitting America%u2019s roads and consumers demand hydrogen stations to fill up at. Any intelligent oil company will start installing them next to their gas pumps now to get a jump on the competition. Of course, there little danger of an oil company acting intelligently, so look for start-up hydrogen suppliers.

I don%u2019t understand why the Democratic candidates are supporting biofuels. I guess they figure it%u2019s what people want to hear. I hope that whoever gets elected pulls their head out and realizes that biofuel is almost as bad as oil-based fuel and will shift focus to truly renewable and sustainable resources for our transportation needs.

[hypnotoad72]

Hmmm, the world is both prospering AND suffering because of the multinational-influenced economy.

No argument that we need to conserve oil, or use it better... raise your hands if you own a SUV and if you think anyone will give you a tax rebate for ditching it?

[scottyusa]

Maybe we should start an oil for food program with these people. You may be right masterballs2 that this is all Bush''s fault but that is no reason for them to help us out for once. If a meteor landed in the middle of the OPEC nations we would be the first to help and would offer the most AS USUAL so you can kiss my butt along with all them OPEC ministers pal.

[netadmin1-2009]

When each of us drive up to the gas pump and fill our gas tanks - we say that a gallon of gas is worth what we pay for it. Otherwise we wouldn''t buy it. It is the same at the grocery store and any stores for that matter. We are to blame for the high prices - the blame can''t be put on any one person or government official.

[stevex47]

"Crude oil prices are being strongly influenced by the weakness in the U.S. dollar, rising inflation and significant flow of funds into the commodities market," it said.

"The dollar sank to record lows Wednesday, with the euro fetching $1.53 for the first time ever in Europe"

Lets just have the election tomorrow and spare Bush further embarrasment. Wow he screwed us.

[billpl-2009]

BS... the arabs would still make a profit at $50 a barrel

[usbrit-2009]

Just FYI - while we''re complaining about $3.50 gas, in the UK it''s 1.05 pound/liter. (= approx. $8.25/US Gallon)!!

[kidd40m]

vote for chaney and this would get even worse

[robstrck]

We know you pay a lot...who gives a ratz azz?
I want $1.71 back now.

Posted by jh6379

~~~~~~~~

You are the poster child for "compassionate" liberals. You sound like a spoiled child.

[singingrick]

If we had only spent the 2 trillion dollars we''re going to spend in Iraq on developing sustainable energy technology that is available now, we would be well on our way to energy independence. Then maybe we would be exporting energy technology instead of dollars and blood. Unfortunately we will have to remove the backward-thinking conservatives, who are in the pockets of big oil, before we can see any progress here.

[kidd40m]

mccain that''s bush boy get him in too and see how sh!!!! it gets

[liberalme]

When each of us drive up to the gas pump and fill our gas tanks - we say that a gallon of gas is worth what we pay for it. Otherwise we wouldn''''t buy it. It is the same at the grocery store and any stores for that matter. We are to blame for the high prices - the blame can''''t be put on any one person or government official.
Posted by netadmin1

Let me get this straight---we have to work, take our kids to school, go to the doctors, shopping etc---we have to eat--so our options are what?

Not everyone can live on a farm and raise their own food and meat--even then--most farms aren''t on a bus route to get to where they have to go.

[oscarez]

Remember folks, Bush is an oil man. $104.00 oil is just making him richer so why should he care. We may see $150.00 oil before Bush''s term is over.

[ioweign]

I hope I live to see the day when these basstards are stuck with barrels of useless oil.

Posted by olebd at 09:03 AM : Mar 05, 2008


How much food do the OPEC countries produce ?

A $104/barrel of oil for us and a $10/box of Cheerios for OPEC...

[davek455]

the people that drive SUVs, gass guzzlers, own huge homes and drive hours to get to them....they''re the ones to blame for this

[bm6005]

The problem with using the term "mis-management" is that it makes it seem as if there was any management to begin with. Remember our gov''t is comprised of Laisez Faire and let the market determine how much to sc rew the American people. How does it feel paying subsidies to the corporation that just registered the highest profit ever? "Vote out ALL incumbents in November" before it''s too late for the American middle class. Or we could just institute debtor''s prisons again!