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Saudi Arabia says it will meet oil demand(Dallas Morning News, The (KRT) Via Acquire Media NewsEdge) JEDDAH, Saudi Arabia _ Saudi Arabia on Sunday said it would supply enough oil to meet global demand for the rest of the year, but differed sharply with the Bush administration by blaming speculators for the sharp increase in oil prices. King Abdullah, the Saudi monarch, hosted Sunday's emergency meeting of producers, consumers and global oil companies to find a way to curb price spikes that have carried oil near $140 a barrel and pushed U.S. gasoline prices past $4 a gallon. The king, in gruff remarks at the opening of the meeting, blamed "the frivolity of the speculators in the market for selfish interests," rising consumption in developing countries and high energy taxes in the West and said it was wrong to blame OPEC. "Your mission is to rule out biased rumors and to reach the real causes for the increase in price," the king urged the delegates. U.S. Energy Secretary Samuel Bodman blamed oil producers. "While increases in near-term oil production like the one Saudi Arabia offered today are welcome and necessary, fundamentally the market needs to see investments in increased long-term production capability and spare capacity," Mr. Bodman said in a prepared statement e-mailed to reporters. A grim-faced Bodman left the meeting striding so rapidly through the lobby of the Jeddah Hilton Hotel that some of his staff had to run to catch up. Analysts were divided on whether the meeting would lead to lower oil prices. Bruce Bullock of SMU's Maguire Energy Institute said market prices might go "sideways" while judging the impact of Saudi production increases. "Can they produce? And if they are going to do it, what kind of excess capacity is going to be left in the market?" he asked. Houston oil analyst Amy Jaffe said speculative buying had pushed oil prices into a bubble that could burst and drop the price back to $100 a barrel. "They (Saudi Arabia) have extra capacity and they know how to flood the market by changing their pricing system, should they decide to," she said. In a final communique, the 36 nations attending agreed that suppliers need to increase investments in production capacity and that "the transparency and regulation of financial markets should be improved." (EDITORS: BEGIN OPTIONAL TRIM) U.S. regulators have taken several steps in recent weeks to heighten oversight of oil futures trading on New York and London markets. Bodman made no reference to those actions in his remarks to the delegates meeting in a 40,000-square-foot ballroom replete with eight giant video screens and 16 crystal chandeliers. Saudi organizers had said they hoped the meeting in the palatial Jeddah Hilton on the Red Sea would move beyond assigning blame and toward consensus on how to turn back this year's oil price hikes. That hope fell apart, however, in the divergence between the U.S. and Saudi positions. (EDITORS: END OPTIONAL TRIM) Bodman met Saturday with Saudi oil minister Ali al-Naimi, but there was "complete disagreement" on why oil prices are so high, said a Saudi source briefed on the session who spoke on condition of anonymity. In his speech at the meeting Sunday, Bodman agreed that there has been an "unprecedented movement of capital into commodities," but he said it was "following the oil market upward _ not leading that movement." Congressional Democrats and some leading Republicans like Rep. Joe Barton, R-Texas, have faulted regulators for not taking a more aggressive look at oil-price movements in the futures markets. Treasury Secretary Henry Paulson has termed the focus on oil-price speculation "tilting at windmills," and Bodman, by saying oil producers were responsible, by default blamed Saudi Arabia, which has most of the world's spare production capacity. "Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing _ and increasingly volatile _ prices," he said. Saudi Arabia's pledge to produce whatever the market demands was coupled with a vow to raise long-term production capacity from 11.2 million barrels a day to 12.5 million by the end of next year and as much as 15 million barrels if needed. (EDITORS: STORY CAN END HERE) But al-Naimi said Sunday that oil price hikes "lie beyond the ability of the petroleum industry to address or even influence." The U.S. and Saudi energy secretaries cited dueling sets of data to argue their positions. Bodman said oil supply was flat between 2005 and 2007, while demand increased throughout that period. Al- Naimi said oil production in the last year has increased at almost double the rate of demand growth. Bodman said his department's analysis of the world oil market showed prices would increase 20 percent for every one percent increase in demand as long as producers failed to provide additional supplies of oil. That analysis, however, fails to account for a doubling of world oil prices in the last year as demand has increased from 85 million barrels a day to 86 million barrels. The heads of the world's largest oil companies, including ExxonMobil Corp. chairman Rex Tillerson, attended Sunday's meeting. The executives and British Prime Minister Gordon Brown stressed the need for oil producers to open their markets for foreign investment in the energy sector. But the communique offered only tepid language urging "enhance(d) cooperation" among international and state-owned oil companies in "investment, technology and human resource development." (EDITORS: STORY CAN END HERE) Brown offered what he called a "new deal" among producing and consuming countries to welcome investments in energy production. He said Britain was talking with sovereign wealth funds in the Arab oil-producing countries about investments in British nuclear power plants. BP, Britain's largest oil company, is in a row with Russian investors over control of investments in Russian oil and natural gas fields. Royal/Dutch Shell has had trouble with the Russian government concerning governance of its $20 billion investments in Sakhalin oil and gas fields. Russia, which vies with Saudi Arabia for the title of the world's biggest oil producer, did not attend the Jeddah meeting. ___ (c) 2008, The Dallas Morning News. Visit The Dallas Morning News on the World Wide Web at http://www.dallasnews.com/ Distributed by McClatchy-Tribune Information Services. 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