US Energy Secy: Oil Prices Hit US Econ; No Recession Yet

The U.S. economy is starting to feel the consequences of sustained high crude oil prices, fueling concerns about a recession, U.S. Secretary of Energy Samuel Bodman said Wednesday.

However, Bodman said it was "too early to say we have" entered a recession in the U.S. "We have not, to my knowledge, gone into recession," Bodman said. "Our economy has been able to withstand the big runoffs in (oil) price but I believe it is starting to have an impact on our economic activity."

Bodman's comments in Cairo come amid continued weak stock markets, rising risk aversion, and a surprise cut in U.S. interest rates Tuesday as concerns about a recession in the U.S. increase.

The secretary last Thursday called on the Organization of Petroleum Exporting Countries to raise crude oil output when it next meets on Feb. 1 as U.S. Energy Information Administration data point to a decline in OECD stocks throughout 2008, thus keeping oil prices high.

But a production cut by OPEC appeared unlikely, Bodman said. "I truly don't expect that to occur," he said.

Bodman is touring the Middle East a week after U.S. President George W. Bush's trip to the region.

Copyright (c) 2008 Dow Jones & Company, Inc.

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Brent Crude Oil : $50.56/BBL 0.15%
Light Crude Oil : $47.7/BBL 0.70%
Natural Gas : $3.05/MMBtu 1.32%
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