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Obama urges oil producers to increase output

By Alister Bull and David Alexander, Reuters

President Barack Obama urged world oil producers to lift crude output this week, as he sought to deflect public anger over high gasoline prices that has hurt his popularity among voters.

U.S. motor fuel prices have become a heated political issue after pushing toward $4 a gallon. Gasoline futures hit 33-month highs on Tuesday.

The rising prices at the pump are fueling voter discontent with Obama's leadership, opinion polls show, and could harm his re-election chances in 2012.

"They need to increase supplies," Obama told CBS affiliate WTKR in Hampton Roads, Virginia.

"We are in a lot of conversations with major oil producers like Saudi Arabia," he separately told WXYZ television in Detroit.

Calling on producers to pump more oil during times of high crude prices was a strategy also used by the administrations of former presidents George W. Bush and Bill Clinton.

Obama, until now, had focused on trying to reduce oil demand, but he made clear in his comments on Tuesday that increasing output was also part of the solution.

"It's the first time the Obama administration has done this, but it's not because they have figured out any new strategy on trying to fight high oil prices," said Tim Evans, energy analyst at Citi Futures Perspective in New York.

"It's because it's the first time they've seen a 30 per cent jump in oil prices over a few months."

Repeating concern that energy traders might be stoking higher prices, the Obama administration's top law enforcement official, Attorney General Eric Holder, told reporters he saw some "disturbing" things in the energy markets.

He said this justified the formation of a task force unveiled last week to probe possible fraud and manipulation of gasoline prices.

Earlier on Tuesday, the president sent a letter to Congress urging it to end tax breaks for oil and gas companies.

 

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http://www.reuters.com/article/2011/04/27/us-usa-obama-oil-letter-idUSTRE73P56O20110427