May 9--WASHINGTON -- The president of OPEC said Thursday that a weak U.S. dollar driven by economic problems was chiefly responsible for record-high U.S. energy prices, and that increasing supply would do little to reduce the pain at the pump for American drivers.
The comments by Chakib Khelil, Algeria's minister of energy and mining, came as oil prices flirted with another record high around $123 a barrel. Congressional Democrats, including Michigan Sen. Carl Levin, increased their calls Thursday for an energy bill aimed at lowering record oil and gasoline prices -- and putting OPEC under U.S. antitrust laws.
"There is a direct correlation between the decrease in the value of the dollar and the increase in the price of oil," Khelil said on the sidelines of the U.S.-Arab Economic Forum, adding that the forecast of $200 a barrel "is possible if we have a continuing devaluation of the dollar."
Since 1945, oil prices have been quoted in U.S. dollars around the world. The dollar has lost 13% of its value against the euro over the past year, and has made imports of many goods and services more expensive.
Khelil said while worries about supply disruptions had also raised prices, the supply from OPEC nations was not an issue, and that the cartel was a scapegoat for rising energy costs.
President George W. Bush said this week that he would ask Saudi Arabia to boost oil output during a visit next week.
The current record price "is the market price, whether we like it or not," Khelil said. "If we look at the fundamental balance between supply and demand, we shouldn't see these prices."
Crude oil prices account for 72% of the price of a gallon of gasoline, with the rest coming from refining, transporting and taxes.
Michigan's average gasoline price hit $3.74 on Thursday, a 9-cent increase in a day, and while gas prices typically peak just before Memorial Day, there's little way to know whether that trend will hold this year.
Levin and Senate Democrats rolled out a new energy bill Wednesday that would take several steps aimed at lowering energy prices, including new curbs on speculation in energy markets and levying a windfall profits tax on oil companies.
Levin said previous research by Senate Democrats had shown that speculation on oil futures was responsible for 30% of the current price of oil. He denounced OPEC's role in setting world prices.
"OPEC is a monopoly. They have squeezed the American people and consumers," Levin said. "Whenever they want to increase or reduce supply, they do it. If they were an American outfit they'd be in jail for monopolistic practices."
Contact JUSTIN HYDE at 202-906-8204 or jhyde@freepress.com.
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