Bush to raise question of oil production with Saudi Arabia

WASHINGTON (Reuters) – U.S. President George W. Bush said Tuesday he will raise concerns about the effects of high energy costs on the global economy when he meets next week with Saudi Crown Prince Abdullah.

“I’m going to explain to him that, you know … high-price crude oil will hurt the international economy,” Bush told CNBC’s Ron Insana in an interview.

The topic of energy, such as near record-high gasoline prices, is expected to be high on the agenda when Bush hosts Abdullah at his Crawford, Texas ranch Monday.

The president said he plans to ask the Saudi prince whether it is possible for his country to step up oil production.

“I think they’re near capacity, and so we’ve just got to get a straight answer from the government as to what they think their excess capacity is,” Bush said, adding that he would not characterize the Saudi production as “flat-out” yet.

OPEC has already raised production by 300,000 barrels per day to 29.76 million bpd in March. More than half of the monthly increase comes from top world exporter Saudi Arabia, which lifted supply by 155,000 bpd to 9.35 million bpd, OPEC said in a report earlier this month.

Saudi Arabia has already told its customers in the United States and elsewhere to expect more oil in May.

Bush said he also wanted to look at whether regulations were constraining expansion at U.S. refineries.

“We’ve got to look at ways to not only mitigate the regulatory causes of price, but also the regulations that will prevent, or discourage people from investing capital to create expansion of refineries,” Bush said.

Wednesday, Bush is scheduled to deliver what the White House has billed as a major speech on energy policy.

Some Democrats are demanding short-term steps to rein in gasoline prices, such as halting efforts to the nation’s strategic oil stockpile.

But Bush said the reserve is intended for emergencies “and that’s what it’s going to be used for.”