INAUGURATING the Jeddah Energy Meeting last week King Abdullah mentioned the role of speculators as a major factor behind the unjustified rise in oil prices. The King listed the reasons for the surging oil prices as “speculators who play the market out of selfish interests, increased consumption by several developing economies and additional taxes on oil in several consuming countries.” The fact that oil prices continue to rise despite the Kingdom's pledge to pump 200,000 barrel of crude per day proves that supply has least to do with what we are witnessing in the volatile market today. The Kingdom had already tried to calm the market by increasing output by 300,000 barrels per day in May. But what happened? Oil price continued to rise. This proves that the factors mentioned by the King are indeed responsible for the untamed price. Oil rose to a new record high above $143 a barrel Monday even as 3,000 delegates opened a two-day meeting of the World Petroleum Congress in Madrid. Consumers always hungry for extra drop of oil are putting the blame on producers and the lack of supply. But Saudi Arabia proved the consumers wrong by taking concrete measures to raise supply and promising that the Kingdom will further increase output if needed. So the consumers must stop pointing accusing finger at producers. Monday's rally of oil – which is priced in the US unit – once again points to the fact that it reacts to the market value of the dollar. The dollar fell against the Euro Monday, increasing the demand for oil from traders, seeking refuge in the black gold as a hedge against inflation. Investors have stuck to oil safety in the wake of the falling US stock market. In this backdrop, delegates meeting in Madrid have a tough job in hand. It is time others follow the Saudi example by taking concrete measures instead of getting involved in the blame game. __
