Jeddah, Saudi Arabia (ANTARA News) - Saudi King Abdullah launched an offensive against "speculators" at a summit on Sunday on the soaring price of crude that called for greater transparency in oil market dealings.
Saudi output has risen to 9.7 million barrels a day, the king said, vowing to increase production further if necessary to defuse market tensions which have ratcheted the price of a barrel of oil up to almost 140 dollars.
The monarch, who said his country would give 1.5 billion dollars to efforts to ease energy shortages in poor countries, told the 36-nation summit that Saudi Arabia was "very concerned" about consumers worldwide.
He blamed increased oil consumption and taxes on fuel, but added: "Among other factors behind this unjust increase in oil prices is the abhorrent act of speculators acting for their own selfish interests."
The Saudi-hosted summit in its Red Sea city of Jeddah was the scene of an international debate over the cause of the doubling of oil prices in the past year.
The United States and other Western powers have blamed production shortfalls while Saudi Arabia and other Organisation of Petroleum Exporting Countries (OPEC) members said speculators have played a key role.
The final communique called for greater regulation of oil markets and greater investment in refinining capacity.
Leaders and ministers from the 36 nations said "the transparency and regulation of financial markets should be improved through measures to capture more data on index fund activity and to examine cross-exchange interactions in the crude market."
It added: "An appropriate increase in investment, both upstream and downstream, is necessary to ensure that the markets are well supplied in a timely and adequate manner."
OPEC was split, however, over whether to follow the Saudi lead in increasing output.
Neighbouring Kuwait said it was ready to increase production, but the OPEC president -- Algeria's Oil Minister Chakib Khelil -- insisted this was not necessary.
US Energy Secretary Samuel Bodman said before the summit that "there is no evidence that we can find that speculators are driving futures prices" to current record heights.
He told the meeting: "Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing -- and increasingly volatile -- prices."
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."
German Economy Minister Michael Glos told the summit an increase in production would be "a strongly needed signal to the financial markets to not gamble any more on an increasing oil price."
India's Finance Minister P. Chidambaram and Australia's Resources and Energy Minister Martin Ferguson also called for increased output.
Kuwaiti Oil Minister Mohammed al-Olaim said OPEC members "will not hesitate" to increase production if the market needs it.
But OPEC chief Khelil insisted there is enough oil to supply the market.
Disconnected from fundamentals
"We believe that the market is in equilibrium. The price is disconnected from fundamentals. It is not a problem of supply," he was quoted by AFP as telling a briefing.
Khelil said the 13-nation OPEC would only consider a production increase at a meeting in September.
"We believe speculation, in its noble and not noble terms, has its impact," the OPEC chief said, also blaming "uncertainties on the dollar" for the price spiral.
A Saudi source said there is scope for other countries to follow his country's production increase as there are up to three million barrels of spare
capacity within OPEC nations.
British Prime Minister Gordon Brown, the senior Western leader at the summit, called for a "new deal" between consumers and producers.
But like many Europeans at the meeting he said production shortages and speculation had to be studied.
Brown said that the world was going through "the biggest of all three oil shocks" in recent decades.
Saudi Oil Minister Ali al-Nuaimi said, however, that the world has enough crude to last "many decades" and that Riyadh will invest massively to be able to produce 15 million barrels a day.
Nuaimi said Saudi Arabia's production capacity will rise to 12.5 million barrels per day (bpd) by the end of 2009 and another 2.5 million bpd could be added if demand warranted.
Saudi output has risen to 9.7 million barrels a day, the king said, vowing to increase production further if necessary to defuse market tensions which have ratcheted the price of a barrel of oil up to almost 140 dollars.
The monarch, who said his country would give 1.5 billion dollars to efforts to ease energy shortages in poor countries, told the 36-nation summit that Saudi Arabia was "very concerned" about consumers worldwide.
He blamed increased oil consumption and taxes on fuel, but added: "Among other factors behind this unjust increase in oil prices is the abhorrent act of speculators acting for their own selfish interests."
The Saudi-hosted summit in its Red Sea city of Jeddah was the scene of an international debate over the cause of the doubling of oil prices in the past year.
The United States and other Western powers have blamed production shortfalls while Saudi Arabia and other Organisation of Petroleum Exporting Countries (OPEC) members said speculators have played a key role.
The final communique called for greater regulation of oil markets and greater investment in refinining capacity.
Leaders and ministers from the 36 nations said "the transparency and regulation of financial markets should be improved through measures to capture more data on index fund activity and to examine cross-exchange interactions in the crude market."
It added: "An appropriate increase in investment, both upstream and downstream, is necessary to ensure that the markets are well supplied in a timely and adequate manner."
OPEC was split, however, over whether to follow the Saudi lead in increasing output.
Neighbouring Kuwait said it was ready to increase production, but the OPEC president -- Algeria's Oil Minister Chakib Khelil -- insisted this was not necessary.
US Energy Secretary Samuel Bodman said before the summit that "there is no evidence that we can find that speculators are driving futures prices" to current record heights.
He told the meeting: "Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing -- and increasingly volatile -- prices."
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."
German Economy Minister Michael Glos told the summit an increase in production would be "a strongly needed signal to the financial markets to not gamble any more on an increasing oil price."
India's Finance Minister P. Chidambaram and Australia's Resources and Energy Minister Martin Ferguson also called for increased output.
Kuwaiti Oil Minister Mohammed al-Olaim said OPEC members "will not hesitate" to increase production if the market needs it.
But OPEC chief Khelil insisted there is enough oil to supply the market.
Disconnected from fundamentals
"We believe that the market is in equilibrium. The price is disconnected from fundamentals. It is not a problem of supply," he was quoted by AFP as telling a briefing.
Khelil said the 13-nation OPEC would only consider a production increase at a meeting in September.
"We believe speculation, in its noble and not noble terms, has its impact," the OPEC chief said, also blaming "uncertainties on the dollar" for the price spiral.
A Saudi source said there is scope for other countries to follow his country's production increase as there are up to three million barrels of spare
capacity within OPEC nations.
British Prime Minister Gordon Brown, the senior Western leader at the summit, called for a "new deal" between consumers and producers.
But like many Europeans at the meeting he said production shortages and speculation had to be studied.
Brown said that the world was going through "the biggest of all three oil shocks" in recent decades.
Saudi Oil Minister Ali al-Nuaimi said, however, that the world has enough crude to last "many decades" and that Riyadh will invest massively to be able to produce 15 million barrels a day.
Nuaimi said Saudi Arabia's production capacity will rise to 12.5 million barrels per day (bpd) by the end of 2009 and another 2.5 million bpd could be added if demand warranted.
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