US blames low inventories for surging prices

Washington: US Energy Secretary Sam Bodman said on Wednesday that record high oil prices are due more to low global petroleum inventories than to a weaker dollar and market speculators.

"Of greater importance is the fact that we have seen a decline in global inventories, that's what's affecting in my judgment...the price of oil," Bodman said in an interview on Bloomberg TV.

The price for US crude oil hit a record $104.56 a barrel on Wednesday at the New York Mercantile Exchange.

"They [Opec members] see speculation in the market. I see a decline in global inventories and I think that is what's driving this," Bodman said.

Ethanol production

Separately, Bodman said he expects US ethanol producers will be able to meet a new federal renewable fuels mandate and that the government would not to issue waivers to ethanol makers in the years ahead for failing to provide enough supplies.

Bodman's comments contradict Guy Caruso, the head of the Energy Department's Energy Information Administration, who told Congress on Tuesday that the United States will fall 3.5 billion gallons short of Congress' mandate that the country's renewable fuels output total 36 billion gallons a year by 2022.