SINGAPORE (AFP) — Crude oil prices rose in Asia on Tuesday despite a call by the world's leading producer, Saudi Arabia, for talks with consumer nations on its soaring cost.
New York's main oil futures contract, light sweet crude for July delivery, gained 71 cents to 135.06 dollars a barrel. The contract slid 4.19 dollars a barrel to close at 134.35 on Monday at the New York Mercantile Exchange.
Brent North Sea crude for July delivery rose 54 cents to 134.45 dollars a barrel, after a fall of 3.78 dollars to 133.91 in London on Monday.
On Friday, the two benchmark crude oil futures contracts hit record all-time highs of 139.12 in New York and 138.12 in London.
The New York contract had its largest price jump on record -- 10.75 dollars -- to settle at 138.54.
"There is a lot of buying interest on the dip (in prices)," said Ken Hasegawa, manager of the energy department at Newedge Japan brokerage.
Global pressure is building to cool oil prices which are stoking inflation and fuelling unrest.
Saudi Arabia on Monday called for talks with consumer nations on the problem and reiterated its readiness to meet any increase in demand.
Hasegawa said the Saudi comments could help to calm the market given time -- but not before prices likely hit 150 dollars a barrel.
"There is no efficient factor to cool down this market below 100 dollars," he said. "I think we are still on the way to go up to 150."
Other analysts have also predicted the price would hit 150 dollars.
Oil prices have soared since breaking through the 100-dollar level at the start of the year.
At a meeting chaired by King Abdullah, the Saudi cabinet restated its view that the leap in prices was unjustified by market fundamentals.
"As a producer nation, Saudi Arabia knows that the oil market has an adequate supply of crude and mounting stocks to trade," the official SPA news agency said.
But the cabinet added it had asked Oil Minister Ali al-Nuaimi to convene a meeting of producer and consumer nations as well as oil firms to discuss the jump in prices "and how to deal with it objectively."
Britain and the United States, which has expressed mounting concern about the impact of high energy costs on the world economy, welcomed the Saudi call.
OPEC Secretary General Abdalla El-Badri said Monday that speculation and a weak US dollar, rather than any supply shortage, were driving prices.
Prices will not fall until clear signs of a decline in global demand for all products, including crude oil, are evident, Hasegawa said.
While there has been decline in the United States, it is not yet clear in Southeast Asia and China, he said.
Malaysia has raised petrol prices 41 percent in a bid to curb its massive subsidies bill, following a similar move in Indonesia where fuel prices jumped by almost 30 percent.
The longer-term demand trend is upwards, boosted by industrialisation in China and India, but fundamental supply and demand factors do not appear to explain the recent spike in prices, AMP Capital Investors said in a report.
Fundamentals would dictate a price around 90 dollars a barrel but the market appears to have become "a classic speculative bandwagon," AMP Capital's chief economist Shane Oliver wrote.
The latest oil price surge is significantly increasing the risk of global recession, he said.
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