October 19, 2007 / 7:43 PM / 11 years ago

White House says crude oil price too high

WASHINGTON (Reuters) - The Bush administration on Friday voiced its dismay at record-high crude oil prices over $90 a barrel, but said it has no plans to suspend oil shipments to the nation’s strategic stockpile despite lawmakers’ warnings that the action is cutting into supplies.

U.S. President George W. Bush talks about sanctions against Myanmar's military junta in the Diplomatic Room of the White House in Washington October 19, 2007. REUTERS/Larry Downing

“It’s far too high,” U.S. Energy Secretary Sam Bodman said when asked about oil prices, which hit an all-time high of $90.07 a barrel.

U.S. oil has rallied more than 15 percent since October 8, driven by fears about tight winter supply and a weakening U.S. dollar, which has propped up prices for oil and other commodities like gold.

The Energy Department will continue its ongoing program to fill the nation’s emergency oil stockpile, Bodman said.

“We have no plans to make any changes,” he told reporters after speaking at a solar energy competition on the Smithsonian Mall.

Oil prices are marching ever closer to their inflation-adjusted high of $101.70 a barrel hit in April 1980, a year after the Iranian revolution.

Earlier on Friday, a White House spokesman said U.S. President George W. Bush would like to see oil prices lower than their current levels.

“There’s no magic to any particular number like $90 a barrel. Obviously we prefer oil prices lower,” White House spokesman Tony Fratto told reporters.

The price rise has also worried OPEC, which may call for an early formal meeting to discuss a further output increase. An OPEC supply rise of 500,000 barrels per day (bpd), agreed last month, will take effect on November 1, but some cartel officials have said there is little it can do to cool down prices.

Bodman did not explicitly call for OPEC to boost its output, but said global producers should weigh oil prices when deciding how much oil to pump.

“I’m hopeful that the exporters, both OPEC and non-OPEC, will take a hard look at it,” he said.

The department is scheduled to add some 6 million barrels of crude through January to the U.S. Strategic Petroleum Reserve. The department last week also sought bids to deliver another 13 million barrels of oil to the stockpile over six months, beginning in February.

“The department should be taking prompt action to alleviate the current crisis in energy prices, rather than reducing oil supplies just when they are needed most,” Democratic senators told Bodman in a letter this week.

The department has said that the amount of oil in question — about 50,000 barrels per day — is modest when compared to the 20 million barrels of oil consumed by U.S. consumers every day.

Additional reporting by Matt Spetalnick and Tom Doggett

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