JEDDAH: The international conference of oil producers and consumers, which opens here on Sunday, will discuss not only the unprecedented hike in oil prices but also the role of speculators and economic analysts in shooting up prices in world markets.

Heads of state and oil ministers will attend the meeting in Jeddah, which was called by Custodian of the Two Holy Mosques King Abdullah, from several countries as well as senior oil company executives.

King Abdullah will open the energy summit that includes separate sessions for energy experts and oil ministers. Saudi Arabia, OPEC, the International Energy Agency, and the International Energy Forum will present a joint paper on the market situation. King Abdullah, British Prime Minister Gordon Brown and Minister of Petroleum and Mineral Resources Ali Al-Naimi will address the opening session. Al-Naimi said the conference would discuss how oil producers and consumers as well as international organizations could cooperate to curb prices and stabilize market.

Al-Naimi has sent invitation to OPEC countries as well as to leading non-OPEC producers such as Russia, Norway, Mexico and Brazil. Mexico’s Energy Minister Georgina Kessel said her country would send the director of state-owned oil giant Pemex, Jesus Reyes Heroles, to the conference. Mexico has no plan to increase output at the moment, she said. “Our capacity to be able to substantially increase our country’s production at this moment is not feasible,” she told Reuters. In fact, the Energy Ministry has recently downgraded its output for 2008 from 3 million barrels per day to 2.9 million bpd.

Top executives from investment banks Goldman Sachs Group Inc. and Morgan Stanley, as well as the major international oil companies are expected to attend the summit. British oil major BP confirmed that its CEO Tony Hayward will attend the summit. An industry source said the CEO of Royal Dutch Shell, Jeroen van der Veer, was also planning to attend.

Brown, who has been urging the OPEC to increase capacity, was delighted when Saudi Arabia responded by calling the Jeddah summit as part of its efforts to stabilize world market. “There are issues about the way OPEC makes its decisions. There are also issues about how OPEC can increase the supply of oil so we can deal with the issue of demand,” Brown said about issues to be discussed at the summit. According to market analysts, the Jeddah conference will also discuss the concern of Third World countries toward food shortage and rising food prices caused by growing oil prices. Food shortage has already triggered crises in many African, Latin American and Asian countries in recent months.

Analysts also hoped that the summit would give an estimate of future prices. In a previous report Morgan Stanley said the prices would reach $150 by the end of the third quarter. The prediction had big impact on the market as the prices went up by six dollars in one day.

The call for the energy summit and Saudi Arabia’s plan to increase output by 200,000 bpd has helped to cool the volatile market. New York’s main oil futures contract, light sweet crude for July delivery, fell by $1.51 to $132.50 per barrel in late afternoon European trading.

The contract had struck a record high point $139.89 on Monday as the market was gripped by supply jitters. Brent North Sea crude for August delivery gave up 89 cents at $132.83 after reaching an all-time high of $139.32 on Monday.

The weekly report from the US Energy Information Administration revealed that crude reserves had fallen by 1.2 million barrels to 301 million barrels for the week ending June 13. Analysts had foreseen a bigger decline of 1.7 million barrels but the difference was not deemed overly significant and the fall sparked another bout of profit taking after Monday’s records.

Ahead of the summit, Indian Oil Minister Murli Deora and German Economy Minister Michael Glos have urged producing countries to pump extra oil to stabilize market.

Deora asked Al-Naimi to reach a consensus with other major producers over raising output. “We are relatively powerless if energy consumption is continuing to rise more and more and energy-consuming countries aren’t doing enough to counter this,” Glos told German television ZDF.

Meanwhile, John Sfakianakis, chief economist at SABB bank, said the link between high oil prices and a week US dollar was likely to fade. “There is a growing disconnect between oil and the dollar,” he told Reuters.

— With input from agencies