Bush frets over energy prices as Kerry attacks

Bush frets over energy prices as Kerry attacks

Update

May 12, 2004 - Reuters Power News
Author(s): Reuters

(Adds EIA comment on gasoline inventories, paragraphs 11-12)

By Tom Doggett and Chris Baltimore WASHINGTON, May 12 (Reuters) -

The White House continued to fret about record-high gasoline prices on Wednesday, while Democratic presidential challenger John Kerry's campaign attacked the Bush administration for failing to address the problem. The national average retail gasoline price is forecast to peak in June at $2.03 per gallon and remain high throughout the summer, according to the U.S. Energy Department. Higher fuel prices will be felt by motorists planning summer vacations, as well as airline passengers, trucking companies and others. President George W. Bush "remains concerned about rising gas prices," White House spokesman Scott McClellan told reporters. But the administration has not proposed any short-term solutions to lower gasoline costs. Record-high gasoline prices have left Bush exposed to continued drubbing from Kerry, who wants to turn them into a campaign issue.

"Another day of record prices and another day of no plans from the White House," said a spokesman for Kerry. "The president needs to get his advisors together to consider every option to address short-term prices." Crude oil futures traded on Wednesday at the New York Mercantile Exchange as high as $40.92 a barrel, near the all-time high of $41.15 set in October 1990. Oil for June delivery settled at a record high of $40.77 a barrel, up 71 cents. Gasoline futures for June delivery settled just above $1.37 a gallon, up 5.12 cents or 3.9 percent on the day. U.S. oil refiners have no quick fix to ease gasoline prices during this summer's peak driving season, the head of an industry trade group told Congress on Wednesday.

"In the short term, there are no 'silver bullets' to alleviate the high costs of gasoline for consumers this summer," said Bob Slaughter, president of the National Petrochemical and Refiners Association. U.S. gasoline inventories fell 1.5 million barrels last week to 202.5 million barrels, the Energy Information Administration reported on Wednesday. The Energy Department's analytical arm suggested gasoline stocks needed to rise above 210 million barrels before "some price relief is seen" at the pump. Crude oil prices, which account for about half the cost of gasoline, have risen despite a proposal by Saudi Arabia, OPEC's top producer, for the cartel to boost its quota by 1.5 million barrels per day when it meets on June 3. Experts say raising OPEC's quota may not actually cause more oil to flow because the cartel is already pumping 2 million barrels per day more than its quota.

Energy Secretary Spencer Abraham on Tuesday said the Saudi idea was "very positive," but on Wednesday refused to answer reporters' questions about soaring energy prices. "We remain in contact with (oil) producers around the world, urging them not to act in a way that would hurt our economy or harm our consumers," McClellan said. Oil prices have rocketed roughly $8, or 24 percent, since the start of the year, driven by stronger-than-expected energy consumption among industrialized nations, explosive China demand and worries about the stability of Middle Eastern oil supplies.

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