U.S. wants OPEC to pump more oil as inventories fall

By Tom Doggett

WASHINGTON (Reuters) - Energy Secretary Sam Bodman said on Wednesday OPEC needs to increase its crude oil production levels when the group meets in September, following a large draw in U.S. oil inventories.

"I'm concerned that we probably are going to need more oil and I'm hopeful that the OPEC ministers at their meeting in about a month from now will agree to that," Bodman said in an interview on

CNBC.

Bodman's comments came after new government data showed U.S. crude oil inventories fell last week by an unexpected 6.5 million barrels, the fourth weekly decline in a row and much larger than analyst estimates of a 700,000-barrel reduction.

Bodman said the current oil supply is "a little short of what we'd like it to be."

"The suppliers ... are having great difficulty keeping up with demand," he said.

Bodman pointed out that more U.S. refineries are coming back online and are using more oil to make petroleum products like gasoline.

A new Reuters survey of OPEC members showed the producer group did pump more oil in July.

The ten OPEC members subject to output targets, which exclude Iraq and Angola, produced an average 26.75 million barrels of oil a day in July, up 150,000 barrels a day from the month before.

The group next meets on September 11 in Vienna to review its oil output policy.

In response to large draw in oil stocks, crude futures prices on the New York Mercantile Exchange shot up to a record $78.77 a barrel, breaking the previous high of $78.40 set on July 14, 2006.

Oil prices fell later in the day after some profit-taking by traders and settled at $76.53 a barrel, down $1.68 or 2.2 percent.

The White House had no comment on the U.S. lower crude inventories and record oil price.

(Additional reporting by Chris Baltimore in Washington)