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Bush wants oil output boosted to avoid economic slowdown
RIYADH, Saudi Arabia -- President Bush warned Tuesday that surging oil prices threaten the U.S. economy and urged OPEC nations to boost their output. His plea drew little sympathy from oil-rich Saudi Arabia, which said production levels appear normal.
Bush and Secretary of State Condoleezza Rice also pressed Arab countries to do more to reach out to Israel and help achieve a Mideast peace agreement before the president's term runs out next January. Avoiding specific orders to Arab allies, Rice said the delicate question of diplomatic relations with Israel, the Arab world's historical enemy, was "another matter and undoubtedly down the road."
Saudi Arabia's foreign minister wondered what more could be expected of them than they are already doing. But Bush, nearing the end of an eight-day Mideast trip, expressed confidence that Arab countries would support both sides in an Israeli-Palestinian accord -- backing Washington sees as crucial to striking and sustaining any agreement. "They want to see a deal done," Bush said. "And they want progress because the issue frustrates them."
As economic anxiety grows in the U.S. and dominates the presidential campaign, Bush is under increasing pressure. After a stop in Egypt today, Bush returns home to weigh whether to join Democrats and Republicans in offering some sort of short-term economic stimulus package.
He promised to tell Saudi King Abdullah that American families are being hurt by oil prices that have topped $100 a barrel, more than three times what they were when he took office.
"These are times of economic uncertainty but I have confidence in the future -- immediate future," Bush said when asked if the U.S. was sliding toward a recession, as some economists fear.
In public, the same Bush whose early career was in the Texas oil fields and who said during his 2000 presidential campaign that the president must "jawbone" oil-producing nations to drop rates had been silent about the issue on this eight-day trip until Tuesday.
He raised the subject here, in the country with the world's largest supply of oil, during a morning meeting with Saudi business leaders, saying oil prices were high and "tough on our economy." He spoke more directly, but still gently, in an afternoon meeting with reporters who were unexpectedly summoned to the guest palace where he stayed one of his two nights.
"I hope that OPEC, if possible, understands that if they could put more supply on the market it would be helpful," he said.
Bush conceded that, in reality, increasing output would be difficult. The demand for oil, particularly from China and India, is stretching available supplies, he said. And "a lot of these oil-producing countries are full out" in terms of what they can produce, he said.
Besides, any increase may not have a big effect on prices, as many economists say the key factor driving them is increased demand, not supply.
In a chilly response to Bush, Saudi Arabia's oil minister, Ali Naimi, told reporters the kingdom would raise production levels only when the market justifies it and that today's inventory seems normal.
The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of the world's needs, next meets Feb. 1 in Vienna, Austria, to consider increasing output.