Saudis to host oil price summit

Energy ministers from more than 30 countries, as well as senior executives from the world’s largest oil companies, are gathering for the conference in the Saudi city of Jeddah amid concerns that recent record oil prices are helping tip the US and other major economies towards recession.

On the eve of the conference, US Energy Secretary Samuel Bodman said rising demand, especially from developing countries like China and India, was growing faster than supply.

"Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices," Mr Bodman said.

Saudi Arabia and countries from Opec – the Organisation of Petroleum Exporting Countries – resist this interpretation, blaming the soaring price, which has risen from about $10 a barrel to nearly $140 in the space of a decade, on market speculators.

Alternative energy

The Saudis raised production by 300,000 barrels a day in May, and are widely reported to be preparing a further rise of 200,000 barrels a day in July.

But analysts say this is unlikely to have much of an effect on the price.

Ahead of the summit, Saudi assistant petroleum minister, Prince Abdulaziz bin Salman, said supply could rise further: "We will meet demand. If customers ask for crude, we shall sell it to them."

But correspondents say other oil producing countries have little spare capacity to boost output.

Efforts to control the price received a further blow this week, following militant attacks on Shell and Chevron facilities in Nigeria which cut the country’s production by more than 300,000 barrels a day.

Consumers are calling on producers to increase refinery capacity, which limits the amount of oil that can be shipped.

British Prime Minister Gordon Brown, who will attend the Jeddah meeting, is calling not only for an increase in oil production but for investment in alternative energy sources.

He wants the wealthier oil producing countries to invest some of their profits in long-term energy projects in Britain, such as wind farms and nuclear power.