Saudi hold OIL Summit June 22

2008-06-11 14:00:46 - Saudi proposal to hold a meeting of oil producers and consumers to discuss rising oil prices. United States have already voiced their agreement with the proposed summit, which would include executives from financial firms Goldman Sachs and Morgan Stanley.Summit shall discuss objectively the root causes of oil price hikes

Organization of Petroleum Exporting Countries (OPEC) and consumer nations are to hold oil meet .The talks in Jeddah, Saudi Arabia, on June 22, said OPEC Secretary General Abdalla El-Badri is to ascertain the reason of surge in oil price without passing buck or balme game.

Iran, the second largest OPEC member, lack of investment by oil producing nations in their energy
sector and financial problems that have plagued their oil exploration and refining industries have each contributed to the rise in crude prices.

US Treasury Secretary Henry Paulson told CNBC television late Monday that the talks in Jeddah must be 'constructive' and that long-term solutions should include 'investing in supply and alternative sources of energy'.
US is the world's biggest energy consumer.Surging oil and food prices in recent months have contributed to 'stagflation', a simultaneous rise in inflation and slower economic activity, in countries around the world.

European countries, the European Commission, the International Energy Agency , the energy watchdog for industrialized countries and the heads of investment banks Morgan Stanley and Goldman Sachs would be invited, he said.

Investment bankers may reflects the view within OPEC, their share 40 percent of world oil, that their inclusion in the discussions seen both as part of the problem and of the solution.

U.S. President George W. Bush calling the initiative "interesting" and British Prime Minister Gordon Brown welcoming it.

"As one of the world's largest producers and consumers, we expect to participate," White House spokesman Tony Fratto said later.

The summit is called to mitgate the blame game and to reach reasons responsible the roots of causing surge oil price to an unaffordable to most of the countries, protests seems to emegre from both developed and devloping nations.
General elections in countries have extra burden along with streamline of their economy with rise in oil price a diificult preposition.

World economy to get slow down WTO reports which wil bring adverse impact on countries with poor and undeveloped economies.Most of the countries have shown keen interest to attend the summit.

The U.S. delegation might find itself facing counterparts from Iran after the Iranian envoy to OPEC, Mohammad Ali Khatibi, said Tuesday that the meeting "could be useful if we delve into the root cause of the market problems."

Kuwaiti Oil Minister Mohammad al-Olaim told reporters: "We do support it ... and we think that the issue is related to consumers and producers as well."

OPEC maintains that the oil market is well supplied and that current prices do not reflect the market fundamentals of supply and demand.

Oil producers have come under U.S. pressure to boost output to help end the volatility in world markets that saw benchmark crude prices in New York jump close to 140 dollars a barrel last Friday.

New York's main oil futures contract, light sweet crude for July delivery, leapt 10.75 dollars a barrel on Friday to 139.12 -- its biggest one-day jump ever.

OPEC controls the output of its members through a production quota system designed to influence the price of oil. Quotas are set at regular meetings.

Analysts in the Gulf said that the call for a meeting was aimed at showing that OPEC states were not responsible for the surge.

"The meeting is needed to discuss objectively the root causes of oil price hikes instead of simply blaming producers for the rise. All sides have got a role to play in resolving the crisis," Kuwaiti oil analyst Kamel al-Harami said.

Saudi economist Ali al-Dakkak said world prices were being driven by "wild speculation" and a lack of refining capacity in consumer countries, especially the United States.

"Consumer demands for increasing output are politically motivated," he said.