Oil prices up again despite Saudi production pledge

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Source: CCTV.com | 06-24-2008 08:37

Light, sweet crude for August delivery rose again to settle at just over 136 US dollars a barrel on the New York Mercantile Exchange. There is widespread disappointment over Saudi Arabia's modest production increase and concerns that output from Nigeria will decline.

A car is filled up at a petrol station in Jeddah on June 21. (AFP/File/Hassan Ammar)

Also at the meeting in Saudi Arabia,China's Vice President Xi Jinping says China will maintain its strategy of developing cleaner and more efficient use of energy, and working towards world energy security.

At a meeting of oil producing and consuming nations, Saudi authorities said it will increase production by 200,000 barrels per day in July. But the US and other nations argue that oil production has not kept up with increasing demand.

Anthony Grisanti, GRZ trading, said, "You know, this has been going on why news like this kind of spikes the market."

But Saudi Arabia and other OPEC countries say there is no shortage of oil and instead blame financial speculation and the falling US dollar.

Speculators have increased their share of oil futures contracts on the New York Mercantile Exchange to 71 percent this year - almost double their figure in 2000. At the same time, contracts held by traditional oil users have fallen by half during the period.

In Washington DC, lawmakers also blame the endless oil price hikes on speculators, but others disagree.

Joe Barton, Congressman, said, "Speculators are not the cause next barrel of oil."

After more than a half dozen hearings in Congress, Democratic lawmakers say they intend to tighten restrictions on pension funds, investment banks and other large investors which they blame for driving up fuel prices.

But many analysts say soaring prices are a reflection of macro-economic factors, including the falling dollar, unrest in the Middle East and increased demand from developing countries.

Editor:Du Xiaodan