Washington High oil and natural gas prices have put energy markets under the greatest strain in a generation, Federal Reserve Chairman Alan Greenspan said Tuesday, but he warned against interfering with market forces he hoped would stabilize prices.
Greenspan expressed a hope that higher prices would spur conservation by businesses and consumers and greater energy exploration by energy companies. That should help get prices under control, he said.
In prepared remarks for an energy conference, he said policy-makers should avoid any action that would "distort or stifle the meaningful functioning of our markets."
Greenspan spoke via satellite to the National Petrochemical and Refiners Assn. meeting in San Antonio. A copy of his remarks was distributed in Washington.
On Wall Street, Greenspan's comments helped give stocks a boost. The Dow Jones industrials gained 37.32 points to close at 10,458.46.
"We must remember that the same price signals that are so critical for balancing energy supply and demand in the short run also signal profit opportunities for long-term supply expansion," Greenspan said, in urging that market forces be allowed to take care of the problem.
The Bush administration has been pushing Congress to enact energy legislation. Lawmakers in the House are working on a bill with the aim of promoting increased production of a broad range of energy sources -- from coal to natural gas. But, the measure is not expected to have much effect on the price increases seen in recent weeks.