UPDATE 1-US says oil price shows tight supply, strong demand

By Tom Doggett

WASHINGTON, May 21 (Reuters) - U.S. Energy Secretary Sam Bodman said on Wednesday that record oil prices fairly reflect tight supplies and strong global oil demand, and that speculators were not at fault for pushing up petroleum costs.

"When you look at the numbers, the production of oil has really been flat," Bodman told reporters. "Clearly, we have an increasing demand for oil in the world."

Asked if the current U.S. oil price, which topped a record $134 a barrel on Wednesday at the New York Mercantile Exchange, fairly reflects supply and demand conditions, Bodman said, "I think it does."

He said there is nothing the government can do this summer to ease gasoline prices for consumers, which hit a record average $3.79 a gallon this week. "I don't think anything can be done near term," he said.

Meanwhile, the executives of five major oil companies testified at a Senate Judiciary Committee hearing looking into why oil prices have doubled in the last year, with the panel's chairman putting some of the blame on speculators.

"Investors are betting up the price of oil and consumers are paying the bill," said Democratic Sen. Patrick Leahy. "We need to get prices under control and back to competitive levels, and we need to do it now."

The federal Energy Information Administration said on Wednesday that high crude oil prices have been behind the run up in gasoline prices and pump costs could keep climbing through June.

"A dramatic increase in the price of crude oil, rather than the transition to (expensive) summer-grade gasoline or the start of the peak summer driving season, has been the main driver in pushing gasoline prices higher so far this spring," the EIA said in its weekly review of the oil market.