RIYADH, 14 June 2008 — Top world oil exporter Saudi Arabia said yesterday a meeting of consumers and producers it will host on June 22 should seek a solution to high oil prices which could hurt the world economy.
Minister of Petroleum and Mineral Resources Ali Al-Naimi, speaking to state news agency SPA, also reiterated that market fundamentals, such as supply and demand, do not justify current prices, which were trading near $135 a barrel yesterday.
US crude oil fell $2.14 to $134.60 a barrel by 1:30 p.m. EDT (1730 GMT). Brent crude traded down $2.13 at $133.96 a barrel.
“The Kingdom called this meeting based on its positive role in international relations ... and its commitment to the world economy and a balanced global oil market...,” SPA quoted Al-Naimi as saying.
Meanwhile, OPEC yesterday became the latest group to cut its forecast for global growth in oil demand in 2008 for the third time this year, adding also that it is pumping more than the forecast demand for its oil.
Global oil demand was now projected to grow by 1.28 percent in 2008, compared with the previous estimate of 1.35 percent, the Organization of Petroleum Exporting countries said in its June monthly report.
“World oil demand growth (in 2008) is forecast to grow by 1.1 million barrels per day (bpd) to average 86.88 million bpd, a downward revision of 0.1 million bpd from the previous report,” OPEC said.
The slowing world economy and mild winter is weighing on demand in industrialized countries belonging to the Organization for Economic Cooperation and Development, OPEC said. At the same time, oil demand remains strong in non-OECD countries. “In the OECD, especially in the US, demand for transport fuel (mainly gasoline) did not grow as expected as a result of slow economic activities and higher oil prices.”
Demand for other products in other OECD countries “was not enough to offset the decline in oil demand in the US in the first five months of 2008,” the report continued.
