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SINGAPORE: Oil prices rose above $132 in Asia on
Wednesday as the world’s biggest producers and consumers prepared
to meet to discuss record crude costs that are stoking fears for the
global economy.
New York’s main oil futures
contract, light sweet crude for July delivery, was $1.15 higher at
$132.46 per barrel after slumping $3.04 to close at $131.31 at the
New York Mercantile Exchange on Tuesday.
The contract rocketed to a record
$139.12 Friday, soaring by $10.75, the largest single-day increase
in history.
Brent North Sea crude for July
delivery rose $1.03 to $132.05 per barrel after a fall of $2.89 to
$131.02 in London on Tuesday.
The Brent contract struck a
historic peak of $138.12 Friday.
“We can continue to expect some
choppy trade, but the overall trend is still upward, with further
price spikes as we head further into the summer,” said Victor Shum,
an analyst at Purvin and Gertz energy consultancy in Singapore.
Saudi Arabia’s Cabinet on
Monday asked Oil Minister Ali al-Nuaimi to convene the meeting of
producer and consumer nations—and oil firms—”to discuss the
jump in prices, its causes and how to deal with it objectively.”
The meeting will take place on
June 22 in the Saudi city of Jeddah, said Abdalla El-Badri,
secretary-general of the Organization of the Petroleum Exporting
Countries (OPEC).
European countries, the European
Commission, the International Energy Agency (IEA)—the energy
watchdog for industrialized countries—and the heads of investment
banks Morgan Stanley and Goldman Sachs would be invited, he said.
The United States, the world’s
biggest energy consumer, will also participate, a White House
spokesman said Tuesday.
Analysts in the Gulf said the
call for the meeting was aimed at showing that OPEC states were not
responsible for the price surge.
OPEC maintains that the oil
market is well supplied and current prices do not reflect the
fundamentals of supply and demand.
Saudi Arabia, a close Western
ally, has come under huge US pressure to boost output.
G8 to contain damage
Ahead of the Jeddah meeting,
finance ministers from the Group of Eight (G8) rich nations will
gather in Japan this weekend to discuss ways to limit the economic
damage of soaring oil prices, which have eclipsed the credit crisis
as their biggest worry.
A global backlash over high fuel
prices escalated on Tuesday. Truck drivers were killed in Spain and
Portugal while manning picket lines, and violent protests spread to
India.
But Shum said there was not much
the G8 nations could do in the near term in the face of slowing
global demand and a tight oil market.
The Paris-based International
Energy Agency said Tuesday it expected global oil demand to average
86.8 million barrels per day this year, 80,000 fewer barrels than
its estimate last month.
It said the downward revision
took account of the reduction of price subsidies in several
countries.
Malaysia has raised petrol prices
41 percent in a bid to curb its massive subsidies bill, following a
similar move in Indonesia, where fuel prices jumped by almost 30
percent. India’s government also raised pump prices.
The International Energy Agency
said the supply situation remains tight, while in the industrialized
nations of the Organization for Economic Cooperation and Development
(OECD), oil demand is falling.
Oil prices have surged since
breaking through the $100 level at the start of the year, and
analysts see prices hitting $150 soon.
--AFP
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