Oil kingpin Saudi calls for talks with consumer countries(z)
JEDDAH - Oil kingpin Saudi Arabia called on Monday for talks with consumer nations on soaring world prices and reiterated its readiness to meet any increase in demand.
The Saudi call was swiftly welcomed by the United States, which has expressed mounting concern about the impact of high energy costs on the world economy, and by Britain.
At a meeting chaired by King Abdullah, the Saudi cabinet restated its view that the leap in prices that saw New York's benchmark contract hit a record US$138.54 on Friday was unjustified by fundamentals.
But it added that it had asked Oil Minister Ali al-Nuaimi to 'convene a meeting soon of representatives of producer and consumer nations and firms operating in the production, export and trading of oil to discuss the jump in prices, its causes and how to deal with it objectively'.
'Saudi Arabia ... has notified all oil companies with which it does business, as well as consumer nations, of its readiness to provide them with any additional quantities of oil they need,' added the cabinet statement carried by the official SPA news agency.
The Saudi cabinet said it still believed that soaring prices 'are not justified by the reality of the oil sector or market fundamentals'.
'As a producer nation, Saudi Arabia knows that the oil market has an adequate supply of crude and mounting stocks to trade,' the SPA report said.
'In coordination with Opec member states and the leading producer countries, the kingdom is working to guarantee supplies to the market... and prevent any unjustified or abnormal increase in oil prices that might affect the world economy, particularly the economies of developing nations.'
The world's leading oil exporter and the dominant producer in the Organisation of Petroleum Exporting Countries cartel, Saudi Arabia announced last month that it would boost its output by 300,000 barrels per day to bring its production for June to 9.45 million bpd.
The close Western ally has come under huge US pressure to boost output to help end the volatility in world markets that saw New York's main oil futures contract, light sweet crude for July delivery, leap US$10.75 a barrel on Friday - its biggest one-day jump ever.
US Treasury Secretary Henry Paulson swiftly welcomed the Saudi call for talks with energy-hungry consumer nations.
'It's got to be constructive. So I welcome it,' Mr Paulson said in an interview with the CNBC business television channel.
'I think that the solutions to the big problem are longer-term solutions in terms of investing in supply and alternative sources of energy,' he said.
'There's no doubt that oil prices where they are is a problem. There's nothing welcome about it, it's a real headwind. We're focused on it.'
Britain also welcomed the Saudi call for talks with consumer nations, and described the current level of oil prices as 'unjustified'.
Prime Minister Gordon Brown 'welcomes this announcement from Saudi Arabia, which Energy Minister Malcolm Wicks will discuss when he visits Saudi Arabia later this week,' a statement from Mr Brown's Downing Street office said.
'This initiative echoes the call from the British Government for enhanced dialogue and meetings between oil producer and consumer nations.
During a visit to Riyadh in May, US President George W. Bush called on the Saudi authorities for the second time in four months to put pressure on fellow Opec producers to boost production.
Washington has repeatedly blamed Opec's refusal to raise its output ceiling for the five-fold surge in world prices since 2003.
The cartel counters that the real reasons for market volatility are a shortage of refining capacity, speculation by traders and political tensions in the main producing regions.
Last week, Crown Prince Sultan bin Abdul Aziz said that even a producer of Saudi Arabia's importance to the world market could not set prices alone. -- AFP
莫思
comments:
this is well expected move, as increasing international presure from the world, which is not only G-8, but i personally think, more of the reactions from developing economies, especially Chindia, ASIANs..etc. as the issue gets hotter and hotter to make everybody hurt, OPEC should know the consequences in both long term economic impact and diplomatic relations.
well, as for the 3 factors in the second last paragraph, i have some saying:
"the real reasons for market volatility are"
1. " a shortage of refining capacity": oh, that is bullshit. we know how thrilling the oil and gas activities have been going through these years! unless he meant that (OPEC countries have) a shortage of refining capacity, which causes the throughput of oil? but this is illogical: first, now we talking about crude oil price, not refineries or its output! second, your shortage of refinery does not mean shortage of the world, unless u mean all the oil has to be refined in ur place? then u r simply the root of devil, even though we can understand OPEC wants to extend their supply chain to higher level, like refinery or even more mature oil product, but at this point in time, u gotta relax ur time table a bit!
2. "speculation by traders": yes, it is as true as usual, but this is a forever on-going activity. so blaming it as a top culprit does not sound quite reasoable. nevertheless, i personally do mandate more stringent regulation in hedge funds and derivetive tradings. we know they are bornt to benefit the market mismatchings and risk hedging, but with the greet and pressue, ppl tend to be selfish enough to forget the overall goodness of others. but this is just where the regulation should comes in. remember, ppl pay u tax, govenors!
3. political tensions in the main producing regions: come on! this is another forever on-going issue, so pls dun blame that much! perhaps the only thing u wanna emphasize is that Israel may attack Iran under xxxxxxx conditions. but who wanna believe that! ok, let's assume Israel is reckless, but US allow it? a lot of conerns there. dun think Iran as Iraq!!! even yes, Iraq war will not repeat in any time soon, unless a few more 911 happen in US again and again.
in all, i think that it's likely to stablize the oil price, but would be a reasonable one. a gradual decline to a $100 level would be quite comfortable to most of the countries now. the sub-$80 would be folded in the history book for some while, at least.