Washington (Platts)--11Sep2007

US Energy Secretary Samuel Bodman Tuesday urged OPEC to increase its
production quota, saying failure to do so could stifle US and world economic
growth.

     Lower economic growth is "not in the interest of suppliers," Bodman told
reporters, following a speech to a conference of historically black colleges
and universities. He added that an increase in supply "would help" curb crude
prices, which have been inching up toward $80/barrel in recent weeks.

     The price increases seem to stem from a combination of supply not meeting
demand and "fear in the market," Bodman said. "Suppliers have had great
difficulty keeping up with demand," he said, adding that OPEC had been "trying
to strike a reasonable balance in a complicated world." 

     OPEC ministers were meeting in closed session in Vienna Tuesday to
discuss whether they should increase crude output. Although some ministers had
continued to insist earlier Tuesday that there was no shortage of crude and
therefore no need for OPEC to raise its formal output limits, Iran said ahead
of the talks that a consensus was emerging around a proposal for a 500,000 b/d
increase.

     Bodman acknowledged that he has spoken to a number of OPEC ministers
ahead of the cartel's gathering, but he would not say who specifically he had
discussions with. Bodman also said he did not call ministers simply because
the OPEC meeting was coming up, but that he talked with them "on a regular
basis." 

     He said "all ministers have listened politely," and his message was
usually the same. "I tell them it is important that they keep markets well
supplied," Bodman said.

     While the US economy has done "remarkably well" coping with strong crude
oil prices in recent years, Bodman said he remains concerned that sustained
high prices could slow economic growth.

		--Cathy Landry, cathy_landry@platts.com