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Saudis face oil pleas at summit Saudis face oil pleas at summit
(about 2 hours later)
Calls for leading oil producers to raise production to try and bring down soaring prices have intensified at a crucial meeting in Saudi Arabia.Calls for leading oil producers to raise production to try and bring down soaring prices have intensified at a crucial meeting in Saudi Arabia.
The US, UK and other consumers urged producers to boost supply, blaming lack of capacity for the recent price surge.The US, UK and other consumers urged producers to boost supply, blaming lack of capacity for the recent price surge.
British Prime Minister Gordon Brown said more production was needed to ease price "uncertainty" and "volatility".British Prime Minister Gordon Brown said more production was needed to ease price "uncertainty" and "volatility".
Saudi Arabia said its output had risen recently and blamed speculation, not lack of supply, on the rise in prices. Saudi Arabia blamed speculation, not lack of supply, for surging prices but said it was willing to raise output.
Saudi Arabia and other members of the Opec producers body blame the soaring price, which has risen from about $10 a barrel to nearly $140 in the space of a decade, on market speculators and high taxes. 'Ready to act'
'Oil fund' The world's largest oil producer has already announced plans to lift daily quotas to 9.7 million barrels by the end of July, an increase of about 500,000 barrels since May.
Saudi King Abdullah Bin Aziz said the world's largest oil producer had recently raised output by about 500,000 barrels a day in an effort to calm worries over supply shortages. But, in an effort to calm worries over supply shortages, it said it would be prepared to pump more "if demand for such quantities materializes and our customers tell us they are needed".
We are very concerned for consumers in all countries Saudi King Abdullah Bin AzizWe are very concerned for consumers in all countries Saudi King Abdullah Bin Aziz
He proposed Opec members contribute $1bn to a fund, under the auspices of the World Bank, to help poorer countries deal with spiralling energy costs. Saudi officials also indicated they could raise its oil "cushion" - the spare production capacity it maintains - above the current 12.5 million barrels per day planned for the end of 2009.
Saudi Arabia would also offer $500m in loans to countries struggling with fuel shortages to promote energy projects. "We are very concerned for consumers in all countries," Saudi King Abdullah Bin Aziz told the meeting in Jeddah, convened after prices rose more than 40% this year to close to $140.
"We are very concerned for consumers in all countries," he told the meeting.
"And we declare our readiness to meet any additional needs.""And we declare our readiness to meet any additional needs."
The BBC's Paul Wood in Jeddah said Saudi Arabia could announce a further increase in supplies shortly but that it was naive to assume this would bring global prices down soon. King Abdullah proposed that members of the Opec producers body could contribute $1bn to a fund to help poorer countries deal with spiralling energy costs.
Energy ministers from more than 30 countries, as well as senior executives from the world's largest oil companies, are attending the conference in the city of Jeddah. Saudi Arabia would also offer $500m in loans to countries struggling with fuel shortages to promote energy projects, he added.
The meeting is taking place amid fears that recent record oil prices are helping tip the US and other major economies towards recession and against a backdrop of protests against rising fuel costs around the world. The BBC's Paul Wood in Jeddah said the Saudi measures would be welcomed but that it would be naive to assume they would have an instant impact on prices.
Addressing the meeting, Mr Brown called for a "new deal" on global energy supplies to benefit both consumers and producers.
Better information was need on the current state of global oil supplies and future demand, he said, while oil producers must diversify beyond oil by investing in other sources of energy.
I urge all oil producers to rigorously break down old barriers standing in the way of new strategic initiatives UK Prime Minister Gordon Brown Seeking an oil price solutionBrown in Saudi to talk oil prices Q&A: Why prices have soaredI urge all oil producers to rigorously break down old barriers standing in the way of new strategic initiatives UK Prime Minister Gordon Brown Seeking an oil price solutionBrown in Saudi to talk oil prices Q&A: Why prices have soared
He also called for "enhanced co-operation" in efforts to reduce global dependence on oil in the long term. The meeting, attended by energy ministers from more than 30 countries as well as senior executives from the world's largest oil companies, is taking place amid fears that recent record oil prices are helping tip the US and other major economies towards recession.
It is happening against a backdrop of protests against rising fuel costs around the world.
'More co-operation'
Addressing the meeting, Mr Brown called for a "new deal" on global energy supplies to benefit both consumers and producers.
Better information was needed on the current state of global oil supplies and future demand, he said, while oil producers must diversify beyond oil by investing in other sources of energy, including renewable projects.
He also called for "enhanced co-operation" between governments to reduce the global economy's dependence on oil.
"I urge all oil producers to rigorously break down old barriers standing in the way of new strategic initiatives," he said."I urge all oil producers to rigorously break down old barriers standing in the way of new strategic initiatives," he said.
"We can make progress in easing the challenges which are facing so many countries in the months ahead.""We can make progress in easing the challenges which are facing so many countries in the months ahead."
Price debate
US Energy Secretary Samuel Bodman said rising demand, especially from developing countries like China and India, was growing faster than supply.
"I believe that most of us agree on one thing: Prices are too high at present," he said.
High fuel prices have sparked protests in several countriesHigh fuel prices have sparked protests in several countries
US Energy Secretary Samuel Bodman said rising demand, especially from countries like China and India, was growing faster than supply and that this was pushing prices up.
"I believe that most of us agree on one thing: Prices are too high at present," he said.
"And unless we act, the situation will remain unsustainable.""And unless we act, the situation will remain unsustainable."
Opec president Chakib Khelil insisted on Sunday that the price of oil was "disconnected from fundamentals" of supply and demand while Qatar's Energy Minister Abdullah Al-Attiya said the world was not facing an oil supply crisis.
Analysts say recent increases in output by Opec members are unlikely to have much of an effect on the price, given that the world's daily oil production is about 80 million barrels.Analysts say recent increases in output by Opec members are unlikely to have much of an effect on the price, given that the world's daily oil production is about 80 million barrels.
"We are going to have to live with high prices," Jan Rudolph, an economist with Global Insight, told the BBC."We are going to have to live with high prices," Jan Rudolph, an economist with Global Insight, told the BBC.
Efforts to control the price received a further blow this week, following militant attacks on Shell and Chevron facilities in Nigeria which cut the country's output by more than 300,000 barrels a day.Efforts to control the price received a further blow this week, following militant attacks on Shell and Chevron facilities in Nigeria which cut the country's output by more than 300,000 barrels a day.
Have you been badly affected by the high oil price? What would you like the summit to achieve? Send us your comments using the form below.Have you been badly affected by the high oil price? What would you like the summit to achieve? Send us your comments using the form below.
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