Saudis struggle to control oil prices
Saudi Arabia’s influential oil minister struggled to rein in a runaway market with assurances about the reliability of supplies as OPEC members gathered in Beirut to consider increasing crude production.
Oil prices have soared to new heights after the weekend’s terrorist attack in the Gulf kingdom.
Saudi Arabia was boosting its own production, but not because the United States had pressured it to do so, the country’s oil minister, Ali Naimi, said yesterday.
“It’s the market’s need, and our customers want that,” he told reporters.
Naimi reiterated that he would push for the Organisation of Petroleum Exporting Countries to raise its output ceiling by 2.5 million barrels a day, or 11%, when the group met tomorrow in the Lebanese capital.
Yet one OPEC Gulf source conveyed a growing sense of despair that “irrational” markets were ignoring the fundamentals of supply and demand for crude and suggested that the group might be powerless to stop prices from rising further.
“The market is buying rumours and selling facts,” said the source.
OPEC pumps more than a third of the world’s oil, and its talks are drawing exceptional attention.
Crude prices have soared to uncomfortable heights in recent weeks due to a combination of strong global demand, low inventories in importing nations and fears about instability in key oil-producing states in the Middle East.
Oil prices surged yesterday, the first day of trading on major markets since the Khobar attack. US light crude for July delivery climbed to $42.33 (€34.47) - the highest settlement price in the contract’s 21-year history.
