Saudis offer more oil TheStar.com - World - Saudis offer more oil
AP PHOTO/ / CARL DE SOUZA
Britain's Prime Minister Gordon Brown, left, talks with Saudi Arabia's Foreign Minister Prince Saud Al-Faisal, in Jiddah, Saudi Arabia, Sunday June 22, 2008.
June 22, 2008
JIDDAH, Saudi Arabia (AP) – Saudi Arabia is willing to produce more oil if customers need it, the kingdom's oil minister said Sunday without citing any specific output increase.
Saudi Arabia, the world's largest oil exporter, has been under intense pressure from the U.S. and other oil consumers to increase its crude output to help slow the soaring price of oil.
The kingdom already announced modest increases and said it would pump 9.7 million barrels a day beginning in July. But those increases have not done much to stem the skyrocketing price of oil, which closed near $135 a barrel on Friday.
The high prices are affecting consumers and economies across the United States, Europe and much of the world. Many countries have experienced social unrest as rising fuel prices have driven significant increases in the cost of food and other basic goods.
The cost of gasoline has also become a sore point in the U.S. presidential race, with U.S. President George W. Bush and Republican candidate John McCain calling for lifting of a long-standing ban on offshore oil and gas drilling to increase domestic oil production. But Democratic candidate Barack Obama has said such steps will do nothing in the short term to ease American consumer's pain.
It was unclear if Oil Minister Ali al-Naimi's remarks Sunday at a high-level oil summit in the port city of Jiddah would quell concerns.
Al-Naimi, who was expected to formally make the announcements in a speech later Sunday, reiterated his government's position that the recent run-up in prices has not been caused by a supply shortage. But he said he also believes each country must do what it can "to alleviate these difficult conditions.''
For the remainder of the year "Saudi Arabia is willing to produce additional barrels of crude oil above and beyond the 9.7 million barrels per day which we plan to produce during the month of July, if demand for such quantities materializes and our customers tell us they are needed," al-Naimi said in the speech, a copy of which was obtained by The Associated Press in advance.
Al-Naimi also said that the kingdom was willing to invest to boost its spare oil production capacity above the current 12.5 million barrels per day planned for the end of 2009, reversing previous statements that the country would not go beyond that figure.
"In addition, we have identified a series of future crude oil mega-increments totaling another 2.5 million barrels per day of capacity that could be built if and when crude oil demand levels warrant their development," he said.
The U.S. and other Western nations have put increasing pressure on Saudi Arabia to increase production, saying insufficient oil production has not kept pace with growing demand.
Earlier Sunday, King Abdullah also said Saudi Arabia was not to blame for soaring oil prices and instead pointed his finger at speculators, high fuel taxes in consuming countries and increased oil consumption in developing economies.
"There are several factors behind the unjustified, swift rise in oil prices and they are: Speculators who play the market out of selfish interests, increased consumption by several developing economies and additional taxes on oil in several consuming countries," the king said.
Abdullah urged the summit's delegates to "uncover the truth'' and dispel rumors to get the "real and full reasons" behind the skyrocketing price of oil.
Saudi Arabia increased oil production by 300,000 barrels a day in May, and a Saudi official confirmed Saturday that the country would add another 200,000 barrels a day in July – for a total of 9.7 million barrels a day.
British Prime Minister Gordon Brown also called for future commitments from producers for increased oil and gas supply but urged that all countries should improve energy efficiency and develop alternative sources of energy, including nuclear power.
Earlier Sunday, U.S. Energy Secretary Samuel Bodman again called on Saudi Arabia to increase production, saying it has not kept pace with growing demand.
Bodman said world oil consumption growth has averaged about 1.8 percent per year since 2003 with the largest share of that growth coming from developing countries like China, India and countries in the Middle East, he said.
But for the past three years, global oil production has remained constant at roughly 85 million barrels a day, and OPEC production has remained largely flat, he said in a written statement.
"I believe that most of us agree on one thing: Prices are too high at present. And unless we act, the situation will remain unsustainable," he said in the statement.
The kingdom called for Sunday's unusual meeting in Jiddah between oil producing and consuming nations as a way to show that it was not deaf to international cries that high oil prices have caused social and economic turmoil.
The Gulf nation also has become increasingly concerned that record oil prices could hinder growth in the U.S. and other major industrialized economies, potentially leading to a decline in oil demand and a sharp drop-off in prices.
Also Sunday, Abdullah called for the creation of a $1 billion energy initiative for poor countries to help them combat the rising cost of fuel. He also said Saudi Arabia would contribute $500 million to help give poor countries loans to finance development and energy projects.
Sunday, June 22, 2008
Saudi's increase oil without citing any specific output increase.
Friday, June 20, 2008
Israel held a rehearsal for a bombing attack on nuclear facilities in Iran
By Grant Smith
June 20 (Bloomberg) -- Crude oil rose in New York, recovering from yesterday's decline, as the weaker dollar enhanced the appeal of commodities as a currency hedge.
Israel held a rehearsal for a bombing attack on nuclear facilities in Iran, the New York Times reported, adding to concern that conflict may cut supply from OPEC's second-largest producer. Oil fell the most in more than a week yesterday after China unexpectedly raised fuel prices by at least 17 percent.
``We're seeing prices rebound after last night's losses as the euro strengthens and traders believe the longer-term trend is upwards,'' said Andrey Kryuchenkov, an analyst at Sucden (U.K.) Ltd. in London. ``Reports of an Israeli training exercise could be stoking concern about Iranian supplies.''
Crude for July delivery climbed as much as $2.55, or 1.9 percent, to $134.48 a barrel in electronic trading on the New York Mercantile Exchange. It was at $133.19 at 12:41 p.m. London time.
Oil workers at Chevron Corp.'s Nigerian unit plan a disruption on June 23 after talks with management failed to resolve a labor dispute, a union official said. Royal Dutch Shell Plc is assessing the impact of an attack yesterday that closed it 190,000 barrel-a-day Bonga platform off Nigeria.
The threat of further disruptions in Africa's second- largest producer has helped push Brent's premium over New York crude to 45 cents, its highest since Feb. 6. West African exports are priced using Brent.
Oseberg Fire
Brent's premium was also supported by the halt of 150,000 barrels a day of North Sea Oseberg crude for a fifth day following a fire at a StatoilHydro ASA platform.
Brent crude oil for August settlement gained as much as $2.88, or 2.2 percent, to $134.88 a barrel on London's ICE Futures Europe exchange. It was at $134.50 at 12:42 p.m. London time.
An Israeli military exercise involving more than 100 Israeli F-16 and F-15 fighters seems to have been a rehearsal for a bombing attack on Iran's nuclear facilities and long-range conventional missiles, the New York Times reported, citing several unidentified U.S. officials.
The dollar headed for a weekly decline against the euro on speculation the Federal Reserve will hold off from raising interest rates next week to support the U.S. economy. It traded for $1.5620 against the euro at 12:11 p.m. London time, from $1.5493 earlier.
Oil futures climbed to a record $139.89 on June 16 and prices are 91 percent higher than a year earlier.
Jeddah Meeting
Saudi Arabia, the world's largest exporter, is gathering producers, oil companies and consuming governments in Jeddah this weekend to discuss surging prices. The kingdom may announce output increases of between 200,000 and 500,000 barrels a day, according to OPEC and media reports.
``We can call it too little, too late,'' said Farzam Kamalabadi, president and chairman of Future Trends International said in a television interview. ``It's not only the issue of supply and demand. There are the issues of the currency, speculation and on top of this more and more the issue of geopolitics.''
Yesterday, oil in New York dropped $4.75, or 3.5 percent, the biggest decline since March 31.
Oil fell after China's National Development and Reform Commission said the world's second-biggest energy consumer will increase gasoline and diesel prices by 1,000 yuan ($145) a ton.
Merrill Lynch
The move will reduce the country's demand growth by 1.5 percent, according to Merrill Lynch & Co. The U.S. Energy Department in a report on June 10 said China's oil consumption is expected to rise 440,000 barrels to an average 8.02 million barrels a day this year.
The decision may actually bolster demand for crude oil as refiners ramp up output to take advantage of higher processing profits, Lehman Brothers Holdings Inc. and Goldman Sachs Group Inc. said in reports.
In the medium term, the price jumps will only reduce demand growth by 6 percent for 2008, said a briefing note written by Goldman's Giovanni Serio and Samantha Dart.
Last Updated: June 20, 2008 07:43 EDT http://www.bloomberg.com/apps/news?pid=20601072&sid=afxp4NUh3pNk&refer=energy
”Irrational” to call for more OPEC oil: President
”Irrational” to call for more OPEC oil: President
Friday, June 20, 2008
ALGIERS — Demand by consumer countries for OPEC to increase its offer of oil is “illogical and irrational,” OPEC President Chakib Khelil told the Algerian official news agency APS.
“Asking OPEC member countries to increase their offer is illogical and irrational,” Mr. Khelil told APS in an interview published on Friday.
His interview came ahead of a meeting of oil producing countries, consumer countries and oil firms in Saudi Arabia on Sunday.
“The (Saudi Arabia) meeting would clarify the positions about the reasons behind this oil prices rise,” he added.
He cited speculation, geopolitical tensions and limited refinery capacities as the “most important reasons” behind the soaring oil prices.
Mr. Khelil, who is Algeria's energy and mining minister, suggested there would be no decision by OPEC as a cartel at the meeting in Saudi Arabia.
“I'm invited as Algeria's energy and mining minister. So, I have no OPEC mandate for a position by this organization,” he said.
OPEC members who would take part at the meeting would give their views, said Mr. Khelil.
Commenting on media reports that Saudi Arabia had hiked production, Khelil said: “The media had reported a 300,000 barrel per day output increase by Saudi Arabia but its impact on the market is nil, the barrel is always at $136 (U.S.). I do not believe that is the problem.”
“OPEC's output accounts for 40 per cent of the world total production while the most big producers are the United States, Norway and Russia which are not OPEC members,” he added.
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