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US energy secretary discusses oil cuts with Saudi Crown Prince

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January 14, 2001 

RIYADH-- (AP) - U.S. Energy Secretary Bill Richardson discussed proposed oil cuts by producing countries with Saudi Arabia's Crown Prince Abdullah and Oil Minister Ali Naimi, a U.S. diplomat said.

The official Saudi Press Agency said the Richardson-Abdullah meeting took place at Riyadh's Al-Yamama Palace but did not say if oil cuts were discussed.

Earlier in the day, U.S. Embassy spokesman Rick Roberts said Richardson would try to convince oil-producing countries not to sharply reduce production.

Richardson's visit comes only days before an OPEC meeting is expected to cut production by about 1.5 million barrels a day.

The U.S. diplomat, speaking on condition of anonymity, said that Abdullah informed Richardson that Saudi Arabia was keen to keep oil markets stable in a way that would guarantee the interest of producing and consuming countries.

The crown prince expressed his country's readiness to guarantee continued oil supplies needed for world economy growth and stated its readiness to increase production when necessary, the diplomat said.

On Friday, Richardson said in Paris he would try to convince oil-producing nations to aim at maintaining the price of oil at dlrs 25 or dlrs 26 a barrel.

"The United States' position is that production cuts at this time are not needed, especially severe steep cuts," he said. "The reason is that crude oil stocks are still below normal."

Oil prices have been on the rise following reports that OPEC might cut production at its Wednesday meeting in Vienna, Austria. On Friday, light sweet crude oil rose 64 cents to dlrs 30.05 a barrel on the New York Mercantile Exchange. In London, the price of Brent crude rose 14 cents a barrel to dlrs 25.75.

OPEC's Secretary-general Ali Rodriguez said Friday that some members wanted a cut of 1 million barrels a day, while others were pushing for 1.5 million to 2 million barrels a day.

He said he was confident the group would reach a compromise next week, but didn't elaborate on which members favored which cuts. He said OPEC estimates current excess supply in the market at about 1.4 million barrels a day.

The Organization of Petroleum Exporting Countries, which produces about 40 percent of the world's oil, is concerned that replenished inventories will coincide with warm weather in consumer countries in the second quarter, lowering demand and triggering a price crash.

But Richardson said Friday that cuts above 1 million barrels a day would be too dramatic. U.S. officials are worried that higher oil prices could deal a further blow to the American economy amid a slowdown.

The U.S. official will also visit Kuwait and the United Arab Emirates as part of his tour of some OPEC countries.

Saudi Arabia, which produces about 8 million barrels a day, is the world's biggest oil producer.