Analysts say Chinese decision to hike petrol and diesel prices could bring down global oil prices.
“The kingdom’s policy is based on supply and demand. If there is more demand, it is natural to offer more crude,” Prince Abdulaziz bin Salman said.
“The kingdom aims at restoring stability to the world’s oil price … We prefer continuity, stability in prices.”
Saudi Arabia’s commitment to meeting any increased demands came as the United States, a key ally for Riyadh, said that insufficient production was driving up prices.
“Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices,” Samuel Bodman, US energy secretary, said.
However, many members of the Organisation of Petroleum Exporting Countries (Opec) say speculation and the weak dollar, not supply, are behind high prices.
A summit working paper obtained by the AFP news agency calls for action to “improve the transparency and regulation of financial markets through measures to capture more data on index fund activity and to examine cross exchange inter-actions in the crude market”.
Shukri Ghanem, Libya’s most senior oil official, said the market had more than enough crude.
“There’s oversupply in the market. We believe the prices are high, but it’s not because of supply and demand,” he said.
‘No new crude’
Andrew Critchlow, Middle East editor of the Dow Jones financial news agency, told Al Jazeera that pumping more crude would do little to alleviate soaring costs.
“Everyone knows there is going to be more crude dumped onto the market … whether that has any effect is another question”
Andrew Critchlow, Dow Jones Middle East editor
“Everyone knows that there is going to be more crude dumped onto the market after some kind of decision on Sunday, whether that has any effect is another question,” he said.
“Most of what the Saudi Arabians have said they are going to produce in addition … everyone knew that this oil was coming on stream, there is no new crude here.
“The reality is Opec doesn’t have a great deal more oil to produce.”
The meeting in Jeddah, hosted by Saudi King Abdullah, will feature Abdullah al-Badri, the Opec secretary-general.
“As many as 38 countries, four international organisations and 30 oil companies have agreed to attend the conference, at which the British prime minister Gordon Brown will give an address,” a Saudi statement said.
Xi Jinping, China’s vice-president, will also attend.
The Asian nation accounts for about 40 per cent of recent growth in global oil consumption.
Saudi Arabia, which is the world’s biggest oil exporter, has a policy of keeping a cushion of spare capacity and has said other Opec members that can bring on extra production quickly would also discuss boosting output to try to tame the oil rally.
“The short-term policies to be discussed include the proposal that those Opec countries that have spare capacity should boost supply, just like Saudi Arabia has announced it will do in July,” a senior Gulf Opec official told the Reuters news agency.
Looking to the longer term, the source also said Saudi Arabia would consider increasing its capacity beyond an existing goal of 12.5 million bpd by the end of next year.
The two other Opec members with some extra capacity are the United Arab Emirates and Kuwait. Another Opec delegate said it was not yet clear whether they would join in any output rise.
However, Dan Lewis from the Economic Reserach Council told Al Jazeera that Opec was becoming increasingly irrelevant to setting the global oil price.
“Its importance has been exaggerated for some time,” he said.
“What is interesting is that Saudi Arabia, which currently produce 9.5m barrels a day, does have spare capacity that could take it up another two million.
“But it is unlikely that they are going to put it up that much because its in their long term interest to keep their reserves in the ground as the price goes higher.”
On Friday, oil prices rose by nearly $3 after an attack on an offshore facility in Nigeria.
Those gains were a reversal of a heavy fall in prices following China’s unexpected decision to raise the retail price of petrol and diesel by up to 18 per cent.
US July crude rose $2.69 to settle at $134.62 a barrel, off highs of $136.80. London Brent was up $2.86 at $134.86.
The rebound left oil prices largely unchanged from the beginning of the week.
Forecasts the previous day had suggested that the move by China would hurt demand, but some analysts now say consumption could rise as the price increase will encourage healthier supply at the pumps.