Jeddah hosts meeting of oil producers, consumers' energy ministers on Sunday

Meeting probes reasons behind price hike, proper realistic solutions

Under the patronage of The Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud, energy ministers of producing and consuming countries will hold ''Jeddah Meeting of Energy'' on Sunday, June 22, 2008.

In a statement to Saudi Press Agency (SPA), the Minister of Petroleum and Mineral Resources Ali bin Ibrahim Al-Naimi said that energy ministers of major oil producing and consuming countries were invited for the meeting, adding that many of them welcomed the invitation and looked forward to participating in this meeting, which is expected to yield positive results contributing to the stability of the international oil market.

He pointed out that OPEC states; major non-OPEC producing countries including: Federal Republic of Russia, Kingdom of Norway, Mexico and Brazil; in addition to major consuming countries including the United States of America, Britain, Germany, France, Japan, China, India, South Africa and others were invited to participate in this meeting.

Some international organizations were invited including Secretariat General of Energy Forum, OPEC Organization, International Energy Agency, European Commission of Energy and world major oil companies, the Minister indicated.

The Minister of Petroleum and Mineral Resources pointed out that Jeddah meeting of energy will discuss the international oil market, the current rise in oil prices, and how producing and consuming countries, relevant international organizations and major oil companies to cooperate in dealing with this phenomenon which is unjustifiable in terms of oil data and market fundamentals and in proposing appropriate solutions to deal with it.

"Emanating from its positive role in international relations in various aspects, its interest in the global economy and the stability of the international oil market, and its keenness on cooperation of producing and consuming countries and relevant bodies to work together to address a global issue that might have negative effects on the global economy, particularly the economies of developing nations, the Kingdom of Saudi Arabia called for this meeting," Al-Naimi said.

Meanwhile, visiting UN Secretary General Ban Ki-moon said OPEC powerhouse Saudi Arabia views skyrocketing oil prices as "abnormally high" and is willing to do what it can to bring them down.

Ban said his talks on Saturday with Saudi King Abdullah had focused on the link between the soaring world crude prices and the worsening food crisis as well as climate change.

"He acknowledged that the current oil prices are abnormally high due to speculative factors and some other national government policies," Ban told reporters before ending a 24-hour visit to the Red Sea city of Jeddah.

"He is willing to do what he can to (bring) the price of oil to adequate levels." The Saudis, whose desert kingdom is the largest oil producer in OPEC, "seem to be considering very seriously how they can address this issue by increasing production," said the UN secretary general. "I expect that they will take some concrete measures."

Media reports have suggested Riyadh plans to raise output next month by about half a million barrels a day to 10 million barrels, a possible sign it is becoming nervous about the political and economic effect of high prices.

Saudi Arabia is hosting on June 22 a summit for consumers and producers after oil prices struck a record high of nearly 140 dollars a barrel this month, stoking fears of surging global inflation and weaker economic growth.

Ban expressed hope the meeting would yield a productive outcome. While reaping record profits, the Saudis are concerned record prices might dampen economic growth and lead to lower oil demand, as is the case in the United States and other developed countries, The New York Times reported.

It said the high prices are also making alternative fuels more viable, threatening the long-term prospects of the oil-based economy of Saudi Arabia, which is currently pumping 9.45 million barrels a day.

OPEC on Friday cut its 2008 estimate of growth in world oil demand, as high prices and slower economic growth put a brake on demand in major industrialized countries, the United States in particular.

Global oil demand was now projected to rise by 1.28 percent in 2008, it said in its June monthly report.

Oil prices -- which have witnessed a fivefold jump since 2003 -- fell back on Friday to just under 135 dollars a barrel.

The Group of Eight (G8) finance chiefs from major industrialized nations have called for an investigation by the International Monetary Fund into the wild swings in energy prices.

Runaway oil prices as well as high food prices pose "a serious challenge to stable growth worldwide" and may worsen poverty and stoke global inflation, the G8 said in a statement capping two days of talks on Saturday in Osaka, Japan.

Ban also conveyed to the Saudi king the concern expressed by several world leaders, notably at the Rome food summit earlier this month, about the impact of soaring oil prices on global food security.

"I am confident that he shares this concern," Ban said, adding that King Abdullah felt that other factors were behind the surge in food prices.

Ban said he told King Abdullah that high food prices were crippling the ability of least developing countries to implement the poverty-reduction Millennium Development Goals.

He also commended the king for his initiative to invest in developing countries to boost agriculture productivity and encouraged other countries to do the same.