US pleads for more oil

Some 400 delegates attended the Riyadh forum

By Frank Gardner in Riyadh

The United States has made a strong plea to Opec oil producers to consider raising their output again.

The US Energy Secretary, Bill Richardson, made the call during an international energy forum in the Saudi capital, Riyadh.

But most Opec countries have neither the will nor the capacity to pump more oil on to the market.

Bill Richardson believes oil production levels are too low

The world's only superpower is for once in a position of weakness.

America believes its fuel stocks are dangerously low, so it is desperate for Opec oil producers to pump more oil.

But for now, they are saying no.

Must come down

The US Energy Secretary had come to Riyadh with a strong message.

He said that historically high oil prices were threatening world economic growth and they must come down.

In a veiled warning to the Opec cartel, he said that in the long term high oil prices drive oil companies to explore outside Opec countries.

The Opec producers attending the energy forum here in Riyadh are well aware of that risk.

Even Saudi Arabia, which is earning windfall profits from current high prices, is uncomfortable with oil above $30 a barrel.

Crown Prince Abdullah is uncomfortable with the price of oil

But memories are still fresh here of the oil price collapse of three years ago.

Opec producers believe there is already enough oil on the market and now they are considering cutting output in the second quarter of next year in case prices collapse again.

That is why they have listened politely to Mr Richardson's message and have chosen to ignore it.

It hurts consuming countries, especially developing ones...We should not accept $30 a barrel

Bill Richardson

This is bad news to consumers in the industrialised world but for developing nations, like India and Pakistan, it threatens a serious economic setback.

Energy officials from those countries have come to Riyadh with a similar plea to that of Mr Richardson.

Asian economies have only recently recovered from the financial crisis of the late 1990s.

They need low oil prices to sustain that recovery, but for now, they look likely to be disappointed.

However, the European Union's energy commissioner appears to be at odds with the US.

Commissioner Loyola de Palacio told the BBC in Riyadh she believed there was no real shortage of oil on the world market.

Instead, she said the oil market needed better information, to avoid prices being driven up by speculation.