It is feared that the agreement by Saudi Arabia to increase oil production will have little effect in the short term following the attacks on Nigeria’s pipelines and subsequent loss of fuel and production.
Saudi Arabia confirmed at emergency meetings yesterday that it would increase oil production to it’s highest level in 30 years in a bid to curb the excessive cost of crude oil, but further rebel hits on the Nigerian pipework, left Western leaders concerned that it would have little effect on the market prices.
Germany’s economy minister Michael Glos said “There is the danger that the markets will be disappointed and the price will increase again.”
OPEC president Chakib Khelil also expressed what we all believe to be true, when he said it was not the lack of supply but rather speculative investment that was driving up oil prices. He did not expect prices to fall after the meetings yesterday.
The price of crude rose this morning to $136 per barrell.
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