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Gordon Brown calls on Opec to lift production amid surging oil price

telegraph.co.uk

Gordon Brown calls on Opec to lift production amid surging oil price

By Angela Monaghan and Edmund Conway

Last Updated: 8:08am BST 28/05/2008

 

 

Gordon Brown has called on the world’s biggest oil producers to increase their dialogue with the key consumers of crude and remove any barriers to increasing future production.

Mr Brown also called on leaders at the upcoming summit of G8 leaders in Tokyo to put the soaring price of crude at the top of its agenda.

In an article for the Guardian newspaper today, Mr Brown argued that just “as we are examining how we can maximise the recovery of oil from the North Sea oilfields, so all oil producers should re-examine whether the barriers that exist to strategic investment should be broken down.”

The Prime Minister’s comments come as the Government battles an economic slowdown that the high price of oil is now compounding.

Mr Brown and Chancellor Alistair Darling are to meet oil industry leaders later today as anger grows at the impact that higher oil prices are having on what drivers pay to fill up.

More than 300 lorries yesterday blocked a two-mile stretch of the A40 in west London, one of the capital’s busiest roads, in the bigegst fuel protest since 2000.

Mr Brown, who has seen his popularity tumble as the economy slows, argued “Globally, producers and consumers share common interests in market stability.

“So instead of Opec going its own way, there should be an enhanced dialogue between producers and consumers about the advance of nuclear, coal and renewables and about greater energy efficiency – as well as about future oil reserves.”

The Organisation of Petroleum Exporting Countries (Opec), which is made up of Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Libya, Indonesia, the UAE, Algeria, Nigeria, Ecuador and Angola, has insisted that the oil market is well supplied.

While oil yesterday fell sharply to beneath the $130 mark, experts warned that the recent spike was unlikely to abate any time soon.

The price of a barrel of Brent dropped more than $4 to $128.25, despite touching $133 earlier in the morning, while in New York the price dropped 2.5pc to $128.85. Prices were little changed this morning.

Crude prices were pushed lower as the dollar strengthened and signs emerged that US fuel consumption is dropping. The debate on whether oil prices are likely to stay high permanently has heated up in recent weeks after the crude price broke the $135-a-barrel level for the first time.

Analysts at Goldman Sachs have forecast that the price could rise to $200 in coming years. However, billionaire investor George Soros said much of the recent increase in oil values had been due to speculation, and said the price may now be a bubble.

The dollar rose ¾ of a cent against the pound yesterday after figures showed consumer confidence in the US economy has hit a new low, and a closely-watched index showed that the house price crash is worsening.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/28/bcnbrown128.xml

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