Facebook Twitter

Saudis urging oil output increase

U.S. may suspend 18¢ federal gas tax for temporary relief

SHARE Saudis urging oil output increase

DUBAI, United Arab Emirates — Saudi Arabia is talking to other producers about pumping more oil in the next few weeks in a bid to bring down prices, which are now at about $30 a barrel, a Saudi oil official said Sunday.

The official, insisting on anonymity, said the target was $25 a barrel.

Saudi Arabia alone has excess production capacity of 2.3 million barrels per day, which can be put on the market in a short period of time, if necessary, the official said. Saudi Arabia is the world's top oil producer and exporter.

At a meeting in Vienna last month, the Organization of Petroleum Exporting Countries agreed to increase output by 708,000 barrels a day starting last Saturday. But since the announcement, oil prices have still continued to rise.

The open-market value of the basket of seven crude oils used by OPEC as a gauge of world oil price levels averaged $30.10 a barrel Thursday, up from $29.58 on Wednesday, OPEC said Friday.

The Saudi economy is 70 percent dependent on oil revenues. Officials fear they will be hurt in the long run if prices remain high.

Pressure is building in the United States, the world's largest oil consumer and a close Saudi ally, for relief from sharply higher gasoline prices. OPEC oil ministers are set to meet in Vienna, Austria in September. They are not expected to take decisions on oil output before then.

In Washington on Sunday, Rep. Dick Armey, R-Texas, said the House would likely go along if the Senate votes to suspend the 18-cent federal gas tax, but a new way would have to be found to pay for highway construction.

At any rate, the House majority leader said, suspending the tax would be a temporary fix to a permanent problem of high gasoline prices. More helpful would be to augment the natural-gas delivery system, deal more forcefully with foreign oil suppliers and cut down on oil imports, he said on "Fox News Sunday."

Along the Wasatch Front, gasoline prices remained fairly steady through the holiday weekend with only sporadic and slight increases observed.

According to the AAA, the average price for a gallon of self-serve unleaded regular in the Salt Lake City-Ogden area Monday is $151.16, up from $145.21 a month ago and $122.67 last year. The current average for Provo-Orem is $1.55.23, up from $151.25 a month ago and $126.30 a year ago.

Thomas Brill, economist for the Utah Office of Energy and Resource Planning, said a recent survey conducted by his office showed average unleaded prices in the Salt Lake Valley to be around $1.55 a gallon. The average in the five northern Rocky Mountain states is $1.61, and the national average hovers around $1.66, according to Brill. The average price in the Midwest is now about $1.80 after prices climbed to $2.20 per gallon in Chicago and Milwaukee two weeks ago, he said.