Oil prices rose today as investors shrugged off Saudi Arabia’s pledge to increase production if needed.
The cost of light, sweet crude increased by more than US$1 to US$136.71 (€88) a barrel in early trading on New York commodity markets.
The price went up despite a commitment by the world’s biggest oil producer at a specially-convened meeting in Jeddah, Saudi Arabia, yesterday to up production levels “if they are needed”.
The Saudi government has been under intense pressure from the US and other oil consumers to increase its crude output to help slow the soaring price of oil.
The kingdom said before the start of the meeting that it would add another 200,000 barrels per day in July, raising total daily output to 9.7 million barrels.
Energy industry analyst John Hall said: “Had Saudi Arabia wanted to make an impact, then it should have offered to increase its output by at least 500,000 barrels per day, or even one million.
“Output from Saudi was destined to increase anyway this year and all that has been given is confirmation of this.”
Analysts said prices remained high today following disruption in Nigeria, Africa’s largest producer. Nigerian oil fields operated by Chevron and Royal Dutch Shell have remained shut after they were attacked last week.
Mr Hall warned: “With further threat of attack on Iran from Israel and further supply disruptions in Nigeria, the oil price is now destined to rise further.”
Brent crude futures rose US$0.69 to US$135.55 (€87.33) a barrel on the ICE Futures exchange in London.
British prime minister Gordon Brown attended the Jeddah meeting, calling for future commitments from producers for increased oil and gas supply as well as urging all countries to improve energy efficiency and develop alternative sources of energy, including nuclear power.
Oil hit a record price of US$139.89 a barrel in New York earlier this month.