With the price of oil hitting record highs, President Bush used a private visit to King Abdullah's ranch in Riyadh, Saudi Arabia, yesterday to make a second attempt to persuade the Saudi government to increase oil production. And while Saudis appeared to rebuff the request, the Saudi oil minister, Ali al-Naimi, said the kingdom had increased output by 300,000 barrels a day, starting May 10.
Naimi said that when supplies to the United States from Venezuela and Mexico had recently been reduced by that amount, Saudi Arabia made up the difference.
"We supplied to the tune of an additional 300,000 barrels per day, from 1.4 to 1.7 million barrels per day, for our customers in the US, so how much more can we do?" he said.
The Saudis have previously rejected American requests to increase production, and Naimi insisted that the increase was in response to demands from some 50 "customers" worldwide. He did not specify further. "Our response is positive," he said at a news conference. "If you want more oil you need to buy it."
Prince Saud al-Faisal, the foreign minister said, at the briefing, "The president showed great concern for the impact on the American economy," adding, "We of course sympathize with that."
Earlier, the White House press secretary, Dana Perino, told reporters aboard Air Force One that Bush was asking for increased production so American consumers could get some relief at the gasoline pump.
In another move aimed at easing prices, the Energy Department bowed to congressional pressure and said yesterday that it would temporarily suspend a program to fill the US strategic oil stocks.
But the move, which some analysts and politicians had hoped would help break the rally in oil prices, failed to sway the market. Crude oil prices hit another record yesterday.
Oil traders dismissed the news from Washington and Riyadh and focused instead on the continuing tensions between growing energy demand and limited supply growth.
"You're getting more oil on the market, so you'd think this would be a reason for prices to pull back down," Thomas Bentz, a senior energy analyst at BNP Paribas in New York, said. "But sometimes the market doesn't react to fundamentals, especially when it's in a bullish mode."
Crude oil futures rose to a record of $126.29 a barrel, up $2.17, on the New York Mercantile Exchange yesterday.
The decision to stop adding to the oil reserve was not entirely a surprise. Three days ago, both the Senate and the House of Representatives voted overwhelmingly to force the administration to freeze its policy of adding oil to the nation's emergency stockpiles.
The administration had planned to add 76,000 barrels a day into the oil reserves between August and December, or a total of 13 million barrels. The reserve, which was last used after Hurricane Katrina struck the Gulf Coast in 2005, has 702.7 million barrels of oil stored in the underground salt caverns in Louisiana and Texas.
The White House had portrayed filling the reserve to its capacity of 727 million barrels a day as a security issue, and a response against sudden disruptions in supplies.
But the policy has come under attack in Congress, including from Republican allies of the president, who have found it difficult to justify taking oil off the market at a time of mounting prices.
Many analysts cautioned the decision was unlikely to have much of an impact on oil or gasoline prices.
Neither gasoline, which now averages $3.79 a gallon nationwide, and diesel, which sells at $4.48 a gallon, are likely to decline in price this summer.