Jeddah, June 22 : The world’s energy powers embarked on a new level of dialogue to rein in runaway Oil prices at an emergency meeting in this Red Sea city, but were unlikely to come up with a quick fix. While British prime minister Gordon Brown said there was a consensus that oil prices were too high, host Saudi Arabia vowed to pump more oil in response to consumer countries’ requests. But, he said that alone would not be enough to calm a market driven by an array of factors. “In this critical hour, the world community should rise to its responsibility and cooperation should be the cornerstone of any effort,” Saudi King Abdullah said at the meeting, calling for a global “energy-for-the-poor” initiative. He said speculators were driving up oil prices, and so were the high fuel taxes in consuming nations coupled with increased demand in developing economies. However, US energy secretary Sam Bodman said the focus on speculators driving up oil prices was misplaced. “There’s no evidence we can find that speculators are driving futures prices,” Bodman said.
The Saudi king promised $500 million in soft loans and called for a $1 billion Organisation of Petroleum Exporting Countries (Opec) fund to help the world’s poor cope with soaring prices that nearly hit $140 a barrel last week. The cost of crude has doubled in a year — fuelling Inflation around the globe and sparking protests from Asia to Western Europe. To curb the rising cost of fuel and food, the world’s major central banks may start raising interest rates. Concrete measures were unlikely to emerge from major producers, consumers and leading oil company executives gathered here to reverse what some see as the world’s third oil shock.
Meanwhile, Opec president Chakib Khelil today opposed any increase in production, “the price is disconnected from fundamentals” of supply and demand. “We believe that the market is in equilibrium. The price is disconnected from fundamentals. It is not a problem of supply,” Khelil, the Algerian oil minister, said as an international summit on the oil price crisis started in the Saudi city of Jeddah.
Khelil said the 13-nation Opec had decided that no special meeting on prices was needed in June and that the market would be studied again at a regular meeting later in the year. “We will meet in December to take a decision,” Khelil said. Western consumer nations at the...
