Oil consumer nations intensified pressure on the oil powers on Sunday to boost production at an international summit on spiralling crude prices in the Saudi city of Jeddah. Divisions within OPEC were exposed as Saudi Arabia was to raise production by 200,000 barrels a day and Kuwait said it was prepared to follow, but the cartel's president insisted that opening the taps further is not the answer to the price crisis.
According to AFP, the summit started with roundtable talks among the 36 states and top international institutions and 30 major oil firms on the causes of the surge to nearly 140 dollars a barrel.
The United States, Germany, India, Australia and other major consumers attended to the meeting, called by Saudi Arabia's King Abdullah, appealing for greater supplies. But the summit hosts and other top providers are also demanding action against "speculators" that they blame for the astonishing rise over the past year.
US Energy Secretary Samuel Bodman insisted that "there is no evidence that we can find that speculators are driving futures prices" to current record heights.
"Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices," he told a press briefing late on Saturday.
"Even despite higher global production for oil so far this year, inventories have been drawn down and production capacity is below historic levels."
Warning that prices would almost certainly rise further, Bodman said: "In the absence of any additional crude supply, for every one percent increase in demand we would expect a 20 percent increase in price in order to balance the market."
Saudi Arabia has said it will step up production by 200,000 barrels to 9.65 million barrels a day from July. And Kuwaiti Oil Minister Mohammed al-Olaim said on Sunday that OPEC members "will not hesitate" to increase production if the market needs it.
But OPEC president Chakib Khelil insisted there is enough oil to supply the market. "We believe that the market is in equilibrium. The price is disconnected from fundamentals. It is not a problem of supply," the Algerian oil minister told a briefing.
"Why would you have a supply problem when demand is going down," he said.
Khelil said the 13-nation Organisation of Petroleum Exporting Countries had decided no special meeting on production was needed now and that a decision would be made at a regular OPEC meeting in September. "We believe speculation, in its noble and not noble terms, has its impact," the OPEC chief said.
