OPEC says will not hesitate to increase output
Speculators blamed for price rise
U.S.: no evidence to support this claim
DUBAI: The conference of oil producers and consumers in Jeddah has exposed rifts between the industrialised countries and oil producers over the cause of surging oil prices.
Saudi Arabia, the world’s largest oil producer along with the rest of the countries belonging to the Organisation of Petroleum Exporting Countries (OPEC), blamed oil speculators for being mainly responsible for the sudden price increase in recent months.
Finance Minister P.Chidambaram also attributed the surge in the oil prices in the past one year to speculators. “How is it that oil prices were US$70 a barrel in August 2007 and how is it that they have doubled when there has been no dramatic change in demand? The causes for the current pandemonium in oil prices lie elsewhere: in unregulated over-the-counter markets and futures trading in oil,” he said.
On the contrary, western countries, led by the United States said the gap between production and demand has been the main cause for the hike.
U.S. Energy Secretary Samuel Bodman said before the summit “there is no evidence that we can find that speculators are driving futures prices” to the current record heights. Saudi Arabia’s King Abdullah bin Abdulaziz said, “Among other factors behind this unjust increase in oil prices is the abhorrent act of speculators seeking to undermine the market.”
The Saudi monarch did not announce any decision to hike output. He reiterated an earlier decision to raise daily production from July by 2,00,000 barrels.
Other OPEC members were also lukewarm towards enhancing supplies.
Algeria’s Oil Minister and OPEC head Chakib Khelil insisted that the market was well supplied and production increases were not necessary now.
Kuwaiti Oil Minister Mohammed al-Olaim said OPEC members “will not hesitate” to increase production in case the market so demands.