Jeddah summit ends
Emergency oil summit calls for price transparency and more spare oil
Posted:23 June 2008
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The world’s biggest oil producer, Saudi Arabia, hosted the emergency meeting to set a common ground between key players to tame wild hikes in oil prices but also to spot the role of speculators in the global oil markets.
Speculators were blamed by producers to have an increasing role in the dramatic rise of crude prices, as the Organization of Petroleum Exporting Countries (Opec) insists, while the lack of global oil supply were the cry of the biggest consumers, such as US and Britain, who welcomed more oil in the market.
While condemning speculators, Saudi King Abdullah bin Abdul Aziz announced at the start of the summit that the country is now producing about 9.7 million barrels a day - a rise of more than 200,000 barrels since May. The Saudi royal said the country is willing to increase oil output if necessary.
However, US Energy Secretary Sam Bodman called on global producers to increase production while refuting claims that speculators are responsible for the record prices.
"Without a sustained increase in global production capacity, markets are expected to remain very tight... Anything that will add supply to the market is important,” he was quoted as saying. “There is no evidence that we can find that speculators are driving futures prices for oil.”
Meanwhile, Opec President Chakib Khalil opposed increased production. Khalil, also Algeria ’s oil minister, said the talks are unlikely to ease record oil prices.
"We believe that the market is in equilibrium. The price is disconnected from fundamentals. It is not a problem of supply,” Khalil was quoted as saying.
The high-profile delegation, which was attended by energy ministers from 36 nations, top executives of major companies such as Shell and BP, and representatives from IEA and EU, ended the one-day conference with a general consensus.
"Participants noted with concern that oil prices have risen sharply and become more hostile due to a host of factors,” said the closing statement.
It said the transparency and regulation of financial markets should be improved through measures to capture more data on index fund activity and to examine cross-exchange interactions in the crude market.
The statement also called for more investments in spare production and refining capacity to sustain sufficient supplied.
"Participants agreed that the situation requires concerted efforts from all parties - producing and consuming countries - to bring stability to the international oil market for the benefit of all,” the statement said.
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