Business | Oil & Gas
Oil summit to find ways to slash prices to begin
Producers must pump more to ease the pain felt in the United States and elsewhere from record fuel prices, US Energy Secretary Samuel Bodman said on Saturday.
- Agencies
- Published: 00:14 June 22, 2008
- Image Credit: AP
- Saudi Assistant Minister for Petroleum Affairs Prince Abdulaziz Bin Salman Bin Abdulaziz addresses journalists at a hotel in the Red Sea port city of Jeddah, Saudi Arabia
Jeddah: Producers must pump more to ease the pain felt in the United States and elsewhere from record fuel prices, US Energy Secretary Samuel Bodman said on Saturday.
He blamed tight supplies for fuelling a rally which lifted oil close to $140 a barrel this week, sparking protests across Asia and Europe.
"Anything that will add supply to the market is important," he said.
"While increases in near term oil production are welcome and necessary, fundamentally the market needs to see investment in increasing the longer term production capability."
"The world faces an extraordinary time that, in my view, demands responsible action from both consuming and producing nations," he said.
Oilpowers and consumer nations haggled on Friday over who is to blame for the spectacular rise in crude prices, as they prepared for a summit in Saudi Arabia on the global energy crisis.
Amid growing pressure for international action as prices speed toward $140 a barrel, the industry was rocked by more bad news when a Nigerian rebel group warned all foreign workers to leave the country or face attack.
The Jeddah Energy Meeting was to consider ways of ending oil price pressures, which have fuelled global inflation.
Growing demand and the need for greater investment in refining have been highlighted, but some nations want the summit to blame the price rises on market funds buying oil futures.
A working paper for the summit's final declaration calls for action to "improve the transparency and regulation of financial markets through measures to capture more data on index fund activity and to examine cross exchange inter-actions in the crude market".
A senior energy official involved in the summit called the document "highly controversial" because of the attack on markets. The document says index funds and other investors have "unrealistic assessments" of the future value of oil.
The official said the attack may be toned down in the final document because of opposition from the US and other major industrial powers. The summit document calls for improved information gathering by groups such as Opec, the International Energy Agency and the International Energy Forum "to improve transparency".
British Prime Minister Gordon Brown, who will be the only major Western leader at the summit, has insisted he was going to urge producer countries to invest more in renewable energy. "I am going to Saudi Arabia to see if we can get a new deal between oil producers and the consumers where oil producers will invest in countries like ours," he said.
Opec members' output hike likely
Opec members with any capacity to spare will discuss boosting output together with Saudi Arabia at the emergency meeting in Jeddah, a senior Gulf official said on Saturday. Saudi Arabia has said it will pump 9.7 million bpd in July, the fastest rate in decades.
The official said that other Opec members would consider cranking up supplies if there is demand for their oil.
"The short-term policies to be discussed include the proposal that those Opec countries that have spare capacity should boost supply," the official said.
Kuwaiti Oil Minister Mohammad Al Olaim said his country will consider its output policy after the summit.
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