Saudi Arabia only agreed to a modest increase in its oil production on Monday, leading to a rise in prices and disappointment among oil consuming nations.
At an oil summit in Jeddah, Saudi Arabia, the country said it would boost production of crude oil by another 200,000 barrels per day in July.
It had already promised another 300,000 barrels, meaning its daily output will now be 9.7 million barrels. However, the United States and other countries say Saudi Arabia's production still falls short of demand.
"The Jeddah meeting became a non-event," Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos, told The Associated Press. "There was no surprise."
After the meeting, light, sweet crude oil to be delivered in August rose $1.38 to settle at $136.74 a barrel on the New York Mercantile Exchange.
Canada's natural resources minister, Gary Lunn, told Canada AM that markets will still set the price and that "there is no silver bullet" that would immediately lower prices.
He hoped that longer-term solutions would emerge, noting a follow-up meeting will take place in London in August.
In Europe, the August contract price for light, sweet crude was US$136.78 per barrel, up $1.29 from Friday's close.
Analysts said the Sunday summit had already been factored in by the market.
"The meeting was mildly positive but it wouldn't really deliver anything that would give a heavy correction in oil," said Mark Pervan, a senior commodity strategist at the ANZ Bank in Melbourne, Australia.
Lunn -- speaking from Doha, Qatar -- said that for the first time, a host of countries recognized "that we do have a serious problem with the price of fuel, and that we do need to work collectively to bring stability into the markets and make them less volatile."
Oil's price has doubled in the past year, going to more than $130 from $65, he noted.
Some analysts said Saudi Arabia's modest boost is offset by production disruptions in Nigeria, another major source of the world's oil.
The United States had argued on the weekend that oil-producing nations simply aren't pumping enough oil. Global production has been flat at about 85 million barrels per day for the past three years, while demand keeps rising.
Saudi Arabia has pointed the finger at speculators.
Lunn suggested that all these factors, taken together, are pushing oil's price up.
"Obviously putting more supply on will make it less volatile, but we need to attract investments, both in more refining capacity and in bringing more capacity online, to bring this under control," he said.
With files from The Associated Press
