Energy Secretary "hopeful" OPEC will raise output

By Scott Malone

WATERTOWN, Massachusetts (Reuters) - Energy Secretary Sam Bodman said on Monday he was "hopeful" that the members of the Organization of Petroleum Exporting Countries would raise production, saying that current elevated oil prices were not in any exporter's interest.

"I am hopeful that they will raise production. I think that they have it," Bodman told Reuters. "To the extent that there is a question of the impact of these prices on economic activity, it's not in the interests of any exporter to see prices at this level."

Oil prices have risen some 40 percent since the summer, approaching the $100-a-barrel mark. Last week they notched a record high above $96, boosted by the weak dollar, tight supplies heading into the Northern Hemisphere winter and speculative inflows.

Bodman added that current high oil prices were a problem for U.S. consumers, particularly people with low incomes.

"Certainly from the standpoint of consumers, it's a terrible problem, particularly for low-income consumers," Bodman said in an interview in Watertown, Massachusetts. "It's a big issue, something we're concerned about. I do worry about its impact on the economy."

U.S. light crude oil futures traded at $94.26, down 1.7 percent, on Monday.

U.S. ECONOMY 'RESILIENT'

Investors and analysts are concerned that high oil prices could slow growth of the U.S. economy by driving up operating costs for large companies and eating into consumer discretionary spending through higher heating oil and gasoline costs.

Bodman said the U.S. economy had so far proven "resilient" in the face of high oil prices, and said it is unclear how long they will remain at their current level.

"It's hard to tell the length of time that we will be looking at these higher prices and it's therefore hard to tell what the economic impact is going to be," he said.

OPEC's next scheduled formal meeting will be on December 5 in the United Arab Emirates. The group supplies more than a third of the world's oil.

Bodman said he would not recommend releasing oil from the Strategic Petroleum Reserve in response to high prices.

"The only way that we're going to use the strategic petroleum reserve is if we have a physical disruption in supply of oil," he said. "This is ultimately the President's decision, but I would say it's certainly not something that I would recommend to him, that we purely on a price basis modify our policy."

Bodman was in Watertown to tour A123 Systems, a Watertown, Massachusetts-based company that is developing lithium-ion batteries for electric cars, including forthcoming models from General Motors Corp (GM.N).

(Editing by Christian Wiessner)