OIL producers are at war with speculators but they have been left speculating themselves over the future of their precious commodity after the Jeddah Energy Meeting, analysts said. Government ministers and traders alike are anxiously waiting to see which way prices go in coming weeks after Sunday's summit of consumers and producers, which Saudi Arabia called in response to the doubling of the cost of a barrel of oil over the past year to almost $140. Most experts agree the concrete result was Saudi Arabia's announcement that it was increasing daily production by more than 200,000 barrels to 9.7 million – and that it could significantly step this up if necessary. Consumer nations and producers had reasons to be satisfied with the final communique. Western nations had sought increased output and the summit called for greater investment in refining capacity to meet increasing demand. Producers led by Saudi Arabia had condemned the role of “speculators” in driving up prices in recent months and they could point to a summit demand for “improved” transparency in oil market deals. Noe Vanhulst, secretary general of the International Energy Forum (IEF), said “a lot of positive signals” had come out of the meeting because of the statements of cooperation between his group, the International Energy Agency and the Organization of Petroleum Exporting Countries (OPEC). The IEF, based in Riyadh, was set up to promote dialogue between oil producers and consumers. The IEA is part of the Organization for Economic Cooperation and Development, representing the world's rich nations, while OPEC is the producers' body. Vanhulst said the “unprecedented” cooperation sends a signal that governments and different institutions are ready to “work jointly on all these fronts to address both supply and demand fundamentals as well as financial market issues at the same time.” “Market participants should be looking more at the facts. There is no shortage of oil now, there are no queues so it's not that there is no oil.” Vanhulst said it was “a very good medium term signal” that Saudi Arabia has already identified an extra 2.5 million barrels of additional capacity and that it could move to 15 million barrels in total after 2009. “If you put all these things together, you are looking at sweeter measures and announcements which I think definitely can and should have a stabilizing impact on the market.” But Raad Al-Kadiri, an analyst with PFC Energy Oil, said it was uncertain whether the summit would dampen “a lot of bullish sentiment in the market.” He said little more could have been expected from summit. “It probably won't lead to a large reduction in prices but whether it leads to an increase only the next couple of weeks will tell. “There was a lot of determination expressed for international cooperation and there was a lot of intent expressed but there were no real concrete solutions apart from Saudi Arabia lifting production.” Kadri added: “There is still quite a gap between consumers and producers as to what they see as the primary factors driving prices up and also what they see as the main priorities and measures that need to be taken to reduce prices.” – __
