RIYADH, Saudi Arabia – Saudi Arabia will call for a summit between oil producing countries and consumer states to discuss soaring energy prices, Information and Culture Minister Iyad Madani said Monday.
The kingdom will also work with OPEC to "guarantee the availability of oil supplies now and in the future," the minister said following the weekly Cabinet meeting, held in the seaport city of Jiddah.
Madani said that the kingdom has informed "all oil companies it deals with as well as countries that consume oil that (the kingdom) is ready to provide them with any additional oil they need."
"The Saudi Cabinet has instructed Oil Minister Ali al-Naimi to call for a meeting in the near future that will include representatives of oil-producing countries, consumers and companies that work in extracting, exporting and selling oil to look into the price hike, its causes and how to deal with it," said Madani.
The Saudi announcement comes just three days after the biggest single-day price leap ever, when oil surged more than $11 to surpass $139 per barrel.
Retail gas prices rose further above $4 Monday in the United States, the world's largest oil consumer, following the unprecedented price rally.
The kingdom will work to ensure there will be no "unwarranted and unnatural oil price hikes that could affect international economies, especially those of developing countries," said Madani.
"There is no justification for the current rise in prices," he said.
On Monday, light, sweet crude for July delivery fell $4.18 to $134.36 a barrel in volatile trading on the New York Mercantile Exchange.
"It's not a situation that's going to move the market today," said Phil Flynn at Alaron Trading Corp. in Chicago, suggesting that there it might have a more long term effect. "I do think a conference is warranted, we need to sit down."
Jim Ritterbusch, president of the U.S.-based energy consultancy Ritterbusch and Associates cautioned that such meetings have taken place in the past and could be more an effort to calm the market without taking concrete measures.
"It's not anywhere near as significant as if they called an emergency OPEC meeting," he said. "It seems to me to be more political than anything ... They're reaching their worry threshold."
The Saudis are concerned that sustained high oil prices will eventually slacken the world's appetite for oil, affecting them in the long run.
Investors last month shrugged off news that Saudi Arabia had increased production by 300,000 barrels a day after a visit from President Bush, who sought a major production increase.
Energy experts say most producers have little ability to expand output. The exception is Saudi Arabia, which is producing about 9.4 million barrels a day and has the ability to increase production by about 2 million barrels a day, but has not done so.
"In the current circumstances, every barrel that can be used is being used," said Addison Armstrong, director of market research at Tradition Energy. "Unless the Saudis and OPEC suddenly produce some oil that nobody has heretofore known about, then this meeting is likely to produce no meaningful outcomes."
The current president of the Organization of Petroleum Exporting Countries, Chakib Khelil, has said that the cartel will make no new decision on production levels until its Sept. 9 meeting in Vienna.