OPEC wants a “solution” to end record oil prices and an examination of the role of speculators when governments of consuming and producing countries meet later this month in Saudi Arabia, OPEC’s secretary general said Wednesday.
Heads of state from the Organization of Petroleum Exporting Countries, their counterparts from importing nations and bank executives have been invited to attend the June 22 meeting in Jeddah to discuss record energy costs that Saudi Arabia, the world's largest oil exporter, says are “unjustified.”
A previous gathering of world energy ministers in Rome two months ago didn’t solve the issue, OPEC Secretary General Abdalla el-Badri said.
“This one is different. This one is specifically to tackle the high oil prices, why they are high, who is to blame,” el-Badri said yesterday in an interview in London. “Is this a real shortage in the market, or speculation, or the dollar? What is wrong?”
Morgan Stanley and Goldman Sachs Group Inc., which this month issued forecasts for oil rising to $150 a barrel, have been asked to the meeting, which was called two days ago by Saudi Arabia. Oil futures in New York touched a record $139.12 a barrel on June 6 and traded as high as $138.30 yesterday.
High prices have forced consumers such as UAL Corp.’s United Airlines and Continental Airlines Inc. to cut jobs and Asian importing nations to slash domestic fuel subsidies. The invitation should be extended to hedge funds, who are more influential in the doubling of oil prices in the past year than any shortage of supply, el-Badri said.
The Commodity Futures Trading Commission, the U.S. regulator that compiles market data, said May 29 it had been investigating since December whether price surges were a result of manipulation by hedge funds or other speculators.
“I’m not advocating eliminating speculation from the market but I am against excess use of this instrument to inflate the price,” el-Badri said.
The United States — the world’s largest energy user — will be represented at the Saudi conference by Energy Secretary Samuel Bodman.
— Bloomberg News