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Crude oil price touches $146 a barrel
Published on Thu, Jul 03, 2008 at 20:46 in 
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NOT RIGHT: Advisor to Minister of Petroleum, Saudi Arabia, blames speculation for price rise.
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Madrid: The price of crude oil shot up to $146 a barrel on the New York Mercantile Exchange (NYMEX) after stockpiles dropped unexpectedly.
US oil stockpiles are at their lowest since January, according to the Energy Department.
Russian President Dmitry Medvedev also added to the nerves when he said he expected crude to hit $150 a barrel. Russia is the world's second-largest crude producer.
Meanwhile, Advisor to Minister of Petroleum, Saudi Arabia, Ibrahim Al Muhanna, has said that the rising price of crude can be blamed on speculation in the futures market.
"Speculation is clearly driving up prices and we will do whatever we can to reduce prices. We want to spread the message that it is over the counter deals and futures market driving up prices and also that OPEC and Saudi will supply oil whenever required. This should remove fear and hopefully bring down prices," Muhanna said.
He also said, "Saudi will sell to whichever country needs it. Saudi Arabia is investing $129 billion by 2012 to increase production to 12.5 million barrels per day. OPEC countries like Saudi will be increasing production of crude. Even though many OPEC countries are not keen to increase production, Saudi Arabia will not lobby to OPEC to increase production; but OPEC countries have said they will supply oil whenever needed."
As surging crude prices worry oil companies, the Union Petroleum Minister Murli Deora, who is at the 19th World Petroleum Congress in Madrid, said the government would be taking steps to help the bleeding oil companies.
"Oil marketing companies have lost much money. This year there's short recovery of Rs 2.45 lakh crore. That is why we have increased prices of LPG, petrol and diesel. We are trying our best so that these companies don't lose more," Deora said.
Deora also clarified about reports of fuel crisis in Chennai and added that the shortage was only for a day.
"It's true that there was a shortage in some of the pumps of BPCL because some ships had not arrived. They were late in clearance. But later on there were no problem at all," he added.
Despite international oil prices galloping past the $145-mark, the government says a price review of petrol and diesel will only come up in October.
On the sidelines of the meet in Madrid, Petroleum Secretary MS Srinivasan said a decision will be taken only after government took stock of the scenario emerging out of international oil prices at that time.
Global crude prices have already crossed $145 a barrel, which is expected to push India's oil import bill this year higher by nearly 76 per cent.
The Indian crude basket touched a lifetime high of $138.99 on Thursday.
(With inputs from Varun Kumar)
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