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Riyadh: Saudi Arabia, which convenes a meeting of government and business leaders today to discuss world energy markets, may find that increasing its own production won't be enough to lower prices.
The kingdom, which is the world's largest exporter, is planning to use the meeting to announce an increase in output. State-owned Saudi Aramco will soon add 500,000 barrels, or 4.6 per cent, to the kingdom's capacity with its Khursaniyah field.
The extra oil "is a step in the right direction, but even with the entire Khursaniyah development, world demand is growing even more than that this year", said Adam Sieminski, chief energy economist at Deutsche Bank. "We need to curtail demand growth, because that's what is boosting oil prices, not speculators."
Saudi Arabia also said it will press consumer nations to curtail the speculation it sees as a major factor behind high oil prices.
"Governments have a role in organising [oil] markets and structuring them in a way that prevents speculators behaving in a manner that has led oil prices to reach their current levels," Deputy Oil Minister Prince Abdul Aziz Bin Salman was quoted as saying in the Saudi-owned Asharq Al Awsat daily.
Saudi Arabia has no "magic wand" to bring down soaring oil prices, Arab News cited Prince Abdul Aziz Bin Salman as saying.
People should not be "overly optimistic" that anything beyond "temporary solutions" will emerge from a meeting of oil consumers and producers in Jeddah today, the Riyadh-based newspaper cited Abdul Aziz as saying.
"The soaring oil prices require immediate intervention by everyone. There are political, econ-omic and regulatory factors involved," Abdul Aziz said, according to the newspaper.
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