In the Middle East, the Saudis and some others were skeptical of U.S. computer models predicting serious supply problems. After all, they were the same kinds of models that had wrongly predicted demand growth in 1997. So Mr. Richardson brought Mr. Hakes along to share data showing that inventories were skimpier than thought. The Saudis argued that demand for oil traditionally drops in the U.S. in the spring, and the market should self-correct. Mr. Hakes responded that demand for crude oil doesn't slump, only the demand for refined products.
Refiners are busy gobbling up oil to make gasoline for summer driving.
Eventually, Mr. Hakes says, the Saudis saw his position. He adds that he finds America's position amusing. Only a year ago, independent U.S. oil-production companies alleged that Saudi Arabia and other foreign producers were dumping cheap oil. That's what wonderful America is all about. Persian Gulf Iran, meanwhile, was opposed to an increase in OPEC production.