Tuesday 5 April 2011

Get real on oil prices says Huhne

Chris Huhne is in Saudi Arabia on his first trip to the middle east since gaining office and is calling on oil producers to set fairer prices. The Energy Secretary is meeting Saudi Oil Minister Ali Ibrahim Al-Naimi and will make a plea saying the oil price must reflect the global supply and demand picture.

Oil prices have remained above $100 a barrel since late-January, and fluctuated over the past month at around $115 following unrest in Libya. This is despite there being no global shortage of oil.

Mr Huhne said: "With oil prices at more than $115 a barrel there could be no more important time to be in Saudi Arabia, whose response to events in recent months has been crucial for keeping the market supplied to meet global demand. There is no shortage of supply, and yet the price has remained high. International energy markets should understand that the current price of oil does not reflect the realities of supply and demand.

"Building greater understanding between consumer and producer countries is more important than ever in these present circumstances."

While in Riyadh, Mr Huhne also met Dr Hashim Yamani, the Head of the King Abdullah City for Atomic and Renewable Energy to discuss the development of renewable energy in Saudi Arabia. Tomorrow he travels to Abu Dhabi to discuss collaborating on CCS projects.