Oil Powers and Consumer Nations Meet on Sunday to Tackle Rising Oil Prices.
Leaders of global oil powers and consumer nations gathered in Jeddah on Sunday seeking ways to control spiralling oil prices seen as a mounting threat to the world economy. Saudi Arabia vowed on the eve of the meeting to release more crude as the price of a barrel hurtles toward 140 dollars, compounding inflation fears of countries reeling from record prices for staple foods.
Oil markets have lurched by up to 10 dollars a day in recent weeks, falling last week after China increased fuel prices, but many analysts expect new attacks in Nigeria to add to tensions this week.
While governments have highlighted refining shortages and increased demand, producer nations say action has also got to be taken to rein in "speculators" who they say have played a key role in the doubling of a price of a barrel over the past year.
"What is bringing us together is a sincere wish to be responsible," Saudi Arabia's Deputy Petroleum Minister Prince Abdulaziz bin Salman told a press conference late Saturday. Saudi Arabia has already announced it will increase output by 200,000 barrels a day to 9.65 million a day. "We will meet demand," the prince vowed. "If demand requires more crude, we shall sell it."
But Saudi Arabia is one of the nations that wants action against "speculators" and its gesture in increasing production has not been matched by other members of the Organization of Petroleum Exporting Countries (OPEC) which accounts for about 40 percent of world output.
OPEC president Chakib Khelil said even that increased production was "irrational and illogical". A Saudi source said there is scope for other countries to follow however. "Some people believe there is one million barrels of spare capacity within OPEC outside Saudi Arabia," the source told reporters. "Saudi Arabia has two million so all together that is three million." World production is currently just over 80 million barrels a day.
But more pressure for increased supplies is expected at the summit. German Economy Minister Michael Glos has called for a speedy increase in supplies. "We need more oil in the world market quickly in order to stop the spiralling prices at the gas pumps" which have passed a "limit" acceptable to consumers, the minister wrote in an article in the Sunday newspaper Bild am Sonntag.
British Prime Minister Gordon Brown, the senior western leader at the summit, has called for a "new deal" between consumers and producers. He wants producer nations to "invest in countries like ours, and oil consumers like us with good companies, with good technology and skills can invest in the oil-producing countries."
Brown said in an interview with The Guardian newspaper that the world was going through "the biggest of all three oil shocks" and called it "the downside of globalisation." He predicted that "the world is going to have to build 1,000 nuclear power stations."
US Energy Secretary Samuel Bodman insisted meanwhile that there is nothing to back accusations that "speculators" had pushed oil prices to their record levels. "There is no evidence that we can find that speculators are driving futures prices," Bodman told a press briefing in Jeddah.
"It is clear that financial markets have seen unprecedented movement of capital into commodities in recent years. Our view is that this capital is following the market upward, it is not leading that movement."
OPEC has argued that speculation and the weak dollar are behind the record prices. Bodman said: "Fundamentally tight market conditions in our view are the major driver of the dramatic price increases that we have seen over the last five years, and particularly in recent months."
Leaders of global oil powers and consumer nations gathered in Jeddah on Sunday seeking ways to control spiralling oil prices seen as a mounting threat to the world economy. Saudi Arabia vowed on the eve of the meeting to release more crude as the price of a barrel hurtles toward 140 dollars, compounding inflation fears of countries reeling from record prices for staple foods.
Oil markets have lurched by up to 10 dollars a day in recent weeks, falling last week after China increased fuel prices, but many analysts expect new attacks in Nigeria to add to tensions this week.
While governments have highlighted refining shortages and increased demand, producer nations say action has also got to be taken to rein in "speculators" who they say have played a key role in the doubling of a price of a barrel over the past year.
"What is bringing us together is a sincere wish to be responsible," Saudi Arabia's Deputy Petroleum Minister Prince Abdulaziz bin Salman told a press conference late Saturday. Saudi Arabia has already announced it will increase output by 200,000 barrels a day to 9.65 million a day. "We will meet demand," the prince vowed. "If demand requires more crude, we shall sell it."
But Saudi Arabia is one of the nations that wants action against "speculators" and its gesture in increasing production has not been matched by other members of the Organization of Petroleum Exporting Countries (OPEC) which accounts for about 40 percent of world output.
OPEC president Chakib Khelil said even that increased production was "irrational and illogical". A Saudi source said there is scope for other countries to follow however. "Some people believe there is one million barrels of spare capacity within OPEC outside Saudi Arabia," the source told reporters. "Saudi Arabia has two million so all together that is three million." World production is currently just over 80 million barrels a day.
But more pressure for increased supplies is expected at the summit. German Economy Minister Michael Glos has called for a speedy increase in supplies. "We need more oil in the world market quickly in order to stop the spiralling prices at the gas pumps" which have passed a "limit" acceptable to consumers, the minister wrote in an article in the Sunday newspaper Bild am Sonntag.
British Prime Minister Gordon Brown, the senior western leader at the summit, has called for a "new deal" between consumers and producers. He wants producer nations to "invest in countries like ours, and oil consumers like us with good companies, with good technology and skills can invest in the oil-producing countries."
Brown said in an interview with The Guardian newspaper that the world was going through "the biggest of all three oil shocks" and called it "the downside of globalisation." He predicted that "the world is going to have to build 1,000 nuclear power stations."
US Energy Secretary Samuel Bodman insisted meanwhile that there is nothing to back accusations that "speculators" had pushed oil prices to their record levels. "There is no evidence that we can find that speculators are driving futures prices," Bodman told a press briefing in Jeddah.
"It is clear that financial markets have seen unprecedented movement of capital into commodities in recent years. Our view is that this capital is following the market upward, it is not leading that movement."
OPEC has argued that speculation and the weak dollar are behind the record prices. Bodman said: "Fundamentally tight market conditions in our view are the major driver of the dramatic price increases that we have seen over the last five years, and particularly in recent months."
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