Reagan Hopes for Stabilization of Oil Prices

President Reagan said today that plummeting oil prices have benefited many Americans even though they have been a hardship for the domestic oil industry, and said he hopes “this whole thing will stabilize very quickly.”

Reagan, responding to an editor’s question at a meeting of the American Society of Newspaper Editors, spoke out on the issue for the first time since Vice President George Bush’s controversial comments during a Middle Eastern tour.

Bush, on his way to Saudi Arabia to meet with King Fahd, said he wouldn’t seek a cut in Saudi crude oil production to drive prices back up, but added, “Clearly I will be saying that stability in the market is a very important thing, and I will be selling very hard in terms of our . . . own domestic interests and thus the interest of our national security.”

Price Surge Triggered

Bush’s comments touched off a surge in world oil prices and prompted criticism in Congress. The Administration has insisted that it wants oil prices to be determined by market forces.

Reagan sounded this note himself, saying, “I hope that the free market place can adjust. I am resistant to the idea of government trying to inject itself through regulations, hoping to bring about a change, because that has never worked.

“We know that it now is a hardship for the oil producing regions and industry here in America,” he said. “At the same time, we can’t deny that it has been of great benefit to the rest of industry in America, to our productivity because of the importance of energy as a part of production, and a benefit to our citizens with the lower prices.”

Many People Benefit

A senior Administration official told a reporter that Reagan’s political advisers believed the drop in oil prices “would bring so many benefits to so many people that it is a political plus and the President should take credit for it.”

This official said Bush, although he supports the Administration policy, “did cross the line enough to be misunderstood” and “made it look like we were trying to fix prices.”

The official said the Administration’s strategy is to insist on reliance on free market forces while expressing sympathy for domestic producers.

Reagan, asked whether he was concerned about the long-term national security effects of a virtual halt in oil exploration, replied, “Yes, and we hope that this whole thing will stabilize very quickly.

“We’re concerned lest some major producers in other parts of the world might start playing games with this, as an effort to eliminate competition,” he said.

“If anyone does and has such an idea, of course, they would be looking forward to a time when they could then skyrocket the prices on a kind of monopoly basis,” he added. “But we still believe in the free market.”