Saudi hosts oil price summit June 22

Saudi Arabia's proposed oil summit for the world's biggest oil producers and consumers to discuss the problem of record crude prices is to take place on June 22, OPEC said Tuesday.

Saudi Arabia, the leading member of the Organization of Petroleum Exporting Countries, proposed the meeting of countries and oil company bosses on Monday. The U.S. said it plans to attend.

The guest also includes leading investment bankers and financiers, who are held responsible by OPEC for driving up the price of oil through speculation.

"It will take place on June 22 in Jeddah," OPEC secretary general Abdalla El-Badri told AFP Tuesday, referring to the Saudi port on the Red Sea.

European countries, the European Commission, the International Energy Agency -- the energy watchdog for industrialized countries -- and the heads of investment banks Morgan Stanley and Goldman Sachs would be invited, he said.

The inclusion of investment bankers reflects the view within OPEC, which pumps about 40 percent of world oil, that they must be included in the discussions and are seen both as part of the problem and of the solution.

Oil politics

The idea of the meeting drew support on Tuesday, with U.S. President George W. Bush calling the initiative "interesting" and British Prime Minister Gordon Brown welcoming it.

"As one of the world's largest producers and consumers, we expect to participate," White House spokesman Tony Fratto said later.

The U.S. delegation might find itself facing counterparts from Iran after the Iranian envoy to OPEC, Mohammad Ali Khatibi, said Tuesday that the meeting "could be useful if we delve into the root cause of the market problems."

Kuwaiti Oil Minister Mohammad al-Olaim told reporters: "We do support it ... and we think that the issue is related to consumers and producers as well."

OPEC maintains that the oil market is well supplied and that current prices do not reflect the market fundamentals of supply and demand.

Oil producers have come under U.S. pressure to boost output to help end the volatility in world markets that saw benchmark crude prices in New York jump close to 140 dollars a barrel last Friday.

New York's main oil futures contract, light sweet crude for July delivery, leapt 10.75 dollars a barrel on Friday to 139.12 -- its biggest one-day jump ever.

OPEC controls the output of its members through a production quota system designed to influence the price of oil. Quotas are set at regular meetings.

Analysts in the Gulf said that the call for a meeting was aimed at showing that OPEC states were not responsible for the surge.

"The meeting is needed to discuss objectively the root causes of oil price hikes instead of simply blaming producers for the rise. All sides have got a role to play in resolving the crisis," Kuwaiti oil analyst Kamel al-Harami said.

Saudi economist Ali al-Dakkak said world prices were being driven by "wild speculation" and a lack of refining capacity in consumer countries, especially the United States.

"Consumer demands for increasing output are politically motivated," he said.