Saudis to host crisis oil summitJune 22nd, 2008 - 3:47 pm ICT by IANS
Riyadh, June 22 (DPA) Saudi Arabia is to host Sunday a summit of oil producers and consumers to discuss soaring oil prices amid expectations that any output increase would have limited impact on prices. Consumer countries, led by the US, blame price surges on insufficient supplies.
“Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices,” US energy secretary Samuel Bodman said on the eve of the summit to be held in the Red Sea port of Jeddah.
But producers argue that it is market speculation that drove oil prices to slightly below 140 dollars per barrel.
Saudi Arabia, the world’s top exporter, increased production by 300,000 barrels a day in May and is widely expected to announce a further increase of 200,000 barrels a day in July.
Saudi Deputy Oil Minister Prince Abdel-Aziz bin Salman said Saturday his country would raise output if there was a demand for it in order to stabilize prices.
“If demand requires more crude, we will sell it,” Salman said.
Saudi Arabia has the capacity to increase its output by up to two million barrels a day but, in return, it wants governments in consumer countries to reduce fuel tax as a way of pushing oil prices down for individual consumers, a Gulf oil source told DPA.
Many members of the Organization of the Petroleum Exporting Countries (OPEC), however, resist an output increase.
Senior oil officials, including Algeria’s Oil Minister, told DPA last week that OPEC was unlikely to raise output as the market is well supplied.
Oil experts argue that any additional increase in low quality crude will be pointless as long as there is a shortage of refining capacities to process this grade.
The Jeddah summit will be attended by ministers from 30 countries as well as senior oil executives from major oil firms.
China’s Vice-President Xi Jinping and British Prime Minister Gordon Brown are expected to attend the meeting.
Fast growing economies in Asia, especially China and India, are fuelling demand for oil.