Washington spars with OPEC over record high oil prices

VIENNA, Austria -- OPEC on Wednesday accused the U.S. of economic "mismanagement" that it said is pushing oil prices to new record highs and rebuffed calls to boost output, laying the blame on the Bush administration.

Oil prices surged for the first time past $104 a barrel at one point Wednesday, after the OPEC announcement and the release of a U.S. government report showing a surprise drop in crude oil stockpiles.

The 13-nation Organization of Petroleum Exporting Countries said it would maintain current production levels because crude supplies are plentiful and demand is expected to weaken in the second quarter.

OPEC President Chakib Khelil told reporters the global market is being affected by what he called "the mismanagement of the U.S. economy," and that America's problems were a key factor in the cartel's decision to hold off on any action.

"If the prices are high, definitely they are not due to a lack of crude. They are due to what's happening in the U.S.," Khelil said. "There is sufficient supply. There's plenty of oil there."

Khelil's comments came one day after U.S. President George W. Bush lashed out at the organization, warning Tuesday: "I think it's a mistake to have your biggest customers' economies slowing down as a result of higher energy prices."

White House spokesman Dana Perino said Wednesday Bush was "disappointed" OPEC didn't do more to rein in prices, which some say are pushing the U.S. economy into recession.

Analyst John Hall, of John Hall Associates in London, said OPEC probably should have added oil to the market as Bush had asked.

"But in this time of intense geopolitical tension, it would be difficult for Saudi (Arabia) or any other producer to acquiesce simply because President Bush had asked them to," he said. "In the short term, any true respite for the consumer is still out of reach."

OPEC said: "Crude oil prices are being strongly influenced by the weakness in the U.S. dollar, rising inflation and significant flow of funds into the commodities market."

Oil shot up a dramatic 19 percent last month as the falling dollar prompted speculators and other investors to shift cash to crude and other commodities as a hedge.

Crude oil for April delivery rose $5, or 5 percent, to settle at $104.52 a barrel on the New York Mercantile Exchange, a record close. Futures touched $104.95 a barrel, the highest since trading began in 1983. Brent crude for April settlement rose 4.2 percent to $101.64 a barrel on London's ICE Futures Europe exchange, a record close.