by Ter­ence Hunt

AP

RIYADH, Saudi Ara­bia — Pres­i­dent Bush failed to win the help he sought from Saudi Ara­bia to relieve sky­rock­et­ing Amer­i­can gas prices Fri­day, a set­back for the for­mer Texas oil­man who took office pre­dict­ing he would jaw­bone oil-producing nations to help the U.S.

Bush got a red-carpet wel­come to this desert king­dom, home to the world’s largest oil reserves, and promised to ask King Abdul­lah to increase pro­duc­tion to reduce pres­sure on prices, which soared past $127 for the first time Fri­day. But Saudi offi­cials said they already were meet­ing the needs of their cus­tomers world­wide and there was no need to pump more.

Their answer recalled Bush’s trip to Saudi Ara­bia in Jan­u­ary when he urged an increase in pro­duc­tion but was rebuffed.

Saudi oil min­is­ter Ali al-Naimi said the king­dom decided on May 10 to increase pro­duc­tion by 300,000 bar­rels a day to help meet U.S. needs after Venezuela and Mex­ico cut back deliveries.

“Sup­ply and demand are in bal­ance today,” al-Naimi told a news con­fer­ence, bristling at crit­i­cism from the U.S. Con­gress. “How much does Saudi Ara­bia need to do to sat­isfy peo­ple who are ques­tion­ing our oil prac­tices and policies?”

Early this week, Sen­ate Democ­rats intro­duced a res­o­lu­tion to block $1.4 bil­lion in arms sales to Saudi Ara­bia unless Riyadh agreed to increase its oil pro­duc­tion by 1 mil­lion bar­rels per day.

Saudi For­eign Min­is­ter Saud al-Faisal said the dis­cus­sion with Bush about oil was friendly. “He didn’t punch any tables or shout at any­body,” the min­is­ter said. “I think he was satisfied.”

That couldn’t be said for at least one of the can­di­dates hop­ing to suc­ceed Bush in Jan­u­ary. Said Demo­c­rat Hillary Rod­ham Clin­ton: “I think it’s very impor­tant that we do some­thing more dra­matic than going to have tea with the Saudis.”

National Secu­rity Adviser Stephen Hadley said con­sumers would not see dra­matic price reduc­tions. Oil experts agreed.

Bernard Pic­chi, an energy ana­lyst at Wall Street Access, an inde­pen­dent research firm, called the 300,000 bar­rel Saudi pro­duc­tion increase “a token amount.”

It would be dif­fer­ent, he said, if Saudi Ara­bia boosted pro­duc­tion by 1 mil­lion or 1.5 mil­lion bar­rels a day. The announced increase will have Saudi Ara­bia pump­ing 9.45 mil­lion bar­rels a day by June, Saudi offi­cials said. That’s about 2 mil­lion bar­rels below its capac­ity. Ana­lysts also dis­counted the impact of the U.S. Energy Department’s announce­ment that it would can­cel ship­ments into the Strate­gic Petro­leum Reserve for six months begin­ning July 1.

“It’s ridicu­lous because I don’t think this is going to bring the price down,” said Phil Flynn, ana­lyst at Alaron Trad­ing Corp., of the Energy Department’s move.

Mid­way through a five-day Mideast trip that began in Israel and ends in Egypt, Bush spent the day with Abdul­lah at his week­end retreat out­side the cap­i­tal. It is known as a horse farm since the king main­tains 150 Ara­bian stal­lions there. The farm also pro­duces thou­sands of goats and sheep, bred for the king’s royal banquets.

The sag­ging U.S. econ­omy and painful gaso­line prices are the top con­cerns of Amer­i­cans in the heart of a heated pres­i­den­tial cam­paign. The run-up in oil prices has been alarming.

Futures prices of crude on the New York Mer­can­tile Exchange have more than dou­bled in the past year, from $62.46 a bar­rel in the first week of May, 2007. Prices reached $100 a bar­rel for the first time in Feb­ru­ary and con­tin­ued ris­ing. They closed at $126.29 Friday.

On Jan. 26, 2000, dur­ing a pres­i­den­tial debate, Bush opposed tak­ing oil from the Strate­gic Petro­leum Reserve and instead said then-President Clin­ton should “jaw­bone” oil pro­duc­ing nations. That week crude oil prices were $28 a barrel.

Hadley said the Saudis briefed Bush on plans to increase their pro­duc­tion capac­ity. They also argued that even an increase would be unlikely to bring down the soar­ing prices, which they said were dri­ven more by uncer­tainty in the mar­ket, lack of refin­ing capac­ity for the type of oil read­ily avail­able and other com­pli­cated dynamics.

Econ­o­mists say prices are being dri­ven up by increased demand, not slow pro­duc­tion. China and India are stretch­ing sup­plies as they use ever increas­ing amounts of energy.

Hadley sug­gested the White House was sat­is­fied with — or at least accepted — the Saudi response. How­ever, he said the Bush admin­is­tra­tion will see if the expla­na­tion “con­forms to what our experts say.”

Hadley said Bush and the king also focused on Iran and con­cern about recent vio­lence in Lebanon, where Hezbol­lah over­ran Beirut neigh­bor­hoods last week in protest of mea­sures by the U.S.-backed gov­ern­ment. The dis­play of mil­i­tary power by the Shi­ite mil­i­tant group, which the U.S. con­sid­ers a ter­ror­ist orga­ni­za­tion, resulted in the worst inter­nal fight­ing since the end of Lebanon’s 1975–90 civil war.

Sunni-dominated Saudi Ara­bia — eager to stop any advance of regional power by Shiite-dominated Iran — joins the West in sup­port­ing Lebanon’s gov­ern­ment. Hadley said Bush and Abdul­lah shared a con­cern that the recent events would “embolden Iran.” The U.S. and Saudi Ara­bia, he said, “are of one mind in con­demn­ing what Hezbol­lah did.”

On Thurs­day, Hezbol­lah and the Lebanese gov­ern­ment reached a deal to end the vio­lence after Lebanon’s Cab­i­net reversed mea­sures aimed at the militants.

Bush’s visit was billed as a cel­e­bra­tion of 75 years of U.S.-Saudi rela­tions, though they have been frayed by Arab per­cep­tions that Wash­ing­ton favors Israel too much in the dis­pute with the Pales­tini­ans, the Iraq war and the Sept. 11, 2001, attacks. The two coun­tries used the occa­sion of Bush’s visit to sign new agreements.

Among them was an agree­ment for the U.S. to assist the king­dom in devel­op­ing civil­ian nuclear power. Another involves U.S. promises to help pro­tect any Saudi nuclear infra­struc­ture with train­ing, the exchange of experts “and other sup­port ser­vices as needed.” Hadley said it would not involve U.S. troops.

Saudi For­eign Min­is­ter Saud al-Faisal, at the news con­fer­ence with the oil min­is­ter, said he shared Bush’s hope for a Mideast peace agree­ment by next Jan­u­ary but sharply crit­i­cized Israel for the “human­is­tic suf­fer­ing weighed upon the West Bank and Gaza Strip pop­u­la­tion” of Pales­tini­ans. He said Israel’s “con­tin­ued pol­icy of expand­ing set­tle­ments on Pales­tin­ian ter­ri­to­ries” under­mines the peace process.