Global Energy Summit in Saudi Arabia Disappoints

Posted by Patrick O'Connor on 6/23/08 10:51 am

As expected, the energy summit in Saudi Arabia on Sunday failed to solve the issues that are driving oil prices higher.  Saudi Arabia announced a production increase of 200,000 barrels per day, but the market has already absorbed that amount.  As a result, crude prices headed higher today.

The meeting of energy ministers from 35 nations accomplished very little.  Instead, everyone defended their already-established opinions about why oil prices have spiked so dramatically: Oil-consuming nations said insufficient supply is driving prices higher, producing nations said speculators are pushing up prices, and everyone agreed that growing demand in emerging economies is a major factor.

“It is not clear that anything you heard today is going to reverse sentiment.  One thing is clear: You are not going to wake up tomorrow and find that oil prices have dropped 20 or 30 dollars,” said Raad Alkadidri, an energy analyst at PFC Energy, quoted in an article in The New York Times.

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