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Bush voices oil concern

The Baltimore Sun

RIYADH, Saudi Arabia -- President Bush urged the Organization of the Petroleum Exporting Countries yesterday to take into account the toll that high oil prices are having on the American economy, gingerly touching on an issue that has begun to color the last year of his presidency and dominate the presidential election campaign.

Speaking to a group of Saudi entrepreneurs and later in an interview with reporters, Bush expressed his concern about the economy in some of his starkest language yet, saying that rising oil and gasoline prices are causing hardship for American families.

"It's affected our families," Bush said in the interview with reporters, adding that he would raise the issue with the Saudi leader, King Abdullah, during a meeting yesterday evening at the king's lush horse farm in the desert outside Riyadh.

As Bush himself acknowledged, it was not clear that the president's entreaties could have any significant effect on oil prices. Bush said the demand for oil, especially from expanding markets in China and India, as well as the United States, was rising faster than supplies.

Saudi Arabia's oil minister, Ali al-Naimi, appeared to rebuff the president's appeal, though he did so gently. "We will raise production when the market justifies it," he said at a news conference after Bush's remarks.

Naimi said that his country shared Bush's concern that a downturn in the American economy could have profound effects around the world, including in the oil market. He even raised the prospect of "recession," a word Bush studiously avoided in his interview with reporters even when pressed.

"Presidents and kings have every right, every privilege, to comment or ask or say whatever they want," Naimi said. "The concern for the U.S. economy is valid, but what affects the U.S. economy is more than the price of oil. We are very much concerned. We don't want the U.S. economy to go into recession in the future."

Nevertheless, Bush urged OPEC to consider increasing production, saying it would be helpful.

Bush, nearing the end of an eight-day trip to the Middle East, has not generally been inclined to weigh in directly on economic matters, but with rising energy costs taking a toll, the price of oil has come up in meetings with the leaders of several Persian Gulf states, including Kuwait, the United Arab Emirates and now Saudi Arabia.

The response has been muted, according to the presidential counselor, Ed Gillespie. "They talked about the nature of the market and the vast demand that's on the world market today for oil," he said Monday night, referring to the leaders Bush met.

Bush last met King Abdullah in Crawford, Texas, in April 2005, before the king's father died and he assumed the Saudi throne. At the time, concern about rising oil prices prompted the Bush administration to ask Saudi Arabia, OPEC's largest producer, to raise production to ease prices. At the time, oil was selling for $54 a barrel; it is now above $90 a barrel.

Since the beginning of the year, oil futures have touched the symbolic mark of $100 a barrel twice because of tensions between Iran and the United States. But prices have fallen in recent days as concerns grow that a possible recession in the United States might cut petroleum consumption. Crude oil for February delivery fell 2.6 percent to $91.78 a barrel on the New York Mercantile Exchange yesterday.

For the most part, a growing American economy has had little trouble absorbing higher oil prices even at near-historic high levels. The United States consumes about a quarter of the world's oil every day. Petroleum consumption last year in America still managed to grow, barely, by 0.2 percent to 20.7 million barrels a day, according to the Energy Department. Global oil demand, meanwhile, has been boosted by strong growth in China and the Middle East, which together accounted for two-thirds of consumption growth last year.

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