Cheney, Saudi king hold talks, oil a focus

By Tabassum Zakaria

RIYADH (Reuters) - U.S. Vice President Dick Cheney met Saudi Arabia's King Abdullah on Friday for talks expected to include cooperation to stabilise the oil market after prices reached record highs.

"I'm sure they will talk about the need for a cooperative way forward to try and stabilise this market, reduce the volatility in the market, and serve the interests of both consumers and producers alike," John Hannah, national security adviser to Cheney, told reporters.

Oil prices have risen in recent weeks to record highs above $100 a barrel because investors have piled into commodities as the value of the U.S. dollar has sharply fallen. The price fell below $100 on Thursday on fears of a U.S. economic slowdown.

Cheney's trip follows a visit to Saudi Arabia by President George W. Bush, who in January called for crude oil exporters' group OPEC to increase production.

Saudi Arabia, a U.S. ally, is the world's top oil exporter and the only OPEC member that can easily add significant amounts of extra oil to the market.

"They are going to build off of the president's discussions here clearly. They will review those discussions. They will review a broad agenda of diplomatic and security issues as well as where we are now in the global energy market," Hannah said.

Cheney will also review his trips in the last few days to Iraq and Afghanistan during his talks with Abdullah at the king's farm on the outskirts of Riyadh.

Cheney, who flew into Riyadh from Oman with his wife Lynne and daughter Liz, arrived at the king's farm, where he was greeted by Abdullah and Saudi aides carrying incense.