Riyad, Saudi Arabia, June 10, 2008 - Saudi Arabia on Monday called for an emergency meeting including both oil producing and oil importing countries to discuss what was it called an “unjustifiable rise in oil prices,” the Saudi newspaper Arabnews reported.

According to the paper the decision was taken by the Council of Ministers, which is headed by King ‘Abdallah. The council claimed the current prices were unreasonably high in terms of market fundamentals.

Saudi Arabia , which has one of the world’s largest known reserves of oil and is a key U.S. ally, has been under heavy pressure from Washington for some time to increase its production. The latest plea was issued by U.S. President George W. Bush during his farewell tour of the region earlier this year.

On Friday a barrel of oil was traded at $139, but after the weekend the price fell to $133.

However, it seems unlikely at the moment that the increase in production will have a major effect on the price of oil.

World Bank chief economist Justin Lin told reporters at an energy conference that the bank expected the price of oil to remain between $104 and $108 for the next three to five years.  

The news of the Saudi call for a meeting pushed the price of a gallon of gas in the U.S. below its historic high of $4.023, which it reached on Sunday.

According to the American Automobile Association and the Oil Price Information Service this was the fist time the national average had reached above four dollars; previously only some parts of the U.S. had noted such levels.

The Media Line’s financial analyst said the price of oil would have a huge effect on people plans for their vacations since the price of oil not only affects the price of gas but also airfares and the tourism industry at large.

Source: The Media Line