Energy Secretary says unclear if more OPEC oil needed
WASHINGTON (Reuters) - The U.S. economy has been "remarkably resilient" to record high oil prices and it is unclear whether markets need additional supplies from OPEC, U.S. Energy Secretary Sam Bodman said on Friday.
The Organization of Petroleum Exporting Countries agreed in September to boost crude supplies by 500,000 barrels per day starting in November, but many analysts have called the move insufficient to avert a squeeze this winter when cold boosts heating oil demand.
"I think it's a question of trying to be sure that our markets are well serviced, and I continue to encourage (OPEC) to do that," Bodman said on the sidelines of a solar energy event. "As to whether (OPEC's recent hike) is enough or not, I don't know. We'll have to wait and see."
Less than an hour after Bodman spoke, U.S. oil prices hit an all-time peak of $84.05 a barrel, eclipsing the previous high of $83.90 hit September 20 as traders weighed concerns of tight oil supply ahead of winter and mounting tensions between Turkey and northern Iraq.
U.S. crude settled up 61 cents at $83.69 a barrel.
Bodman said the U.S. economy has been "remarkably resilient" to high oil prices so far.
Oil prices have quadrupled since 2002, but are still below their $90-a-barrel inflation-adjusted peak hit during the Iranian revolution in 1979.
Economists have expressed concern that high oil prices, combined with a severe housing slowdown, could combine to slow overall U.S. economic growth.
Earlier this week the International Energy Agency, adviser to 26 industrial countries, said record-high crude oil prices have already dented global energy demand.
The IEA also slightly lowered its forecast for the amount of oil that OPEC will need to pump in the final months of 2007. The IEA said it still expects tight supplies this winter as demand for heating fuel rises.
Bodman said swing suppliers like Saudi Arabia -- OPEC's top producer -- have lost their ability to keep a lid on crude oil prices.
"The suppliers to some degree have lost control over pricing and prices are now set in the trading rooms," Bodman said.
Bodman added that the U.S. plan to fill the Strategic Petroleum Reserve with royalty-in-kind oil would not have a material impact to oil prices.
