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Wednesday, July 30, 2014

Sunday, June 22, 2008
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Oil powers, consumers debate as Jeddah summit begins today

Oil powers and consumers haggled Saturday over how much to blame market speculators for the spectacular rise in crude prices ahead of a summit on the energy crisis, officials said.

Saudi Arabia has organised a meeting of producers and consumers for Sunday at which Britain's Prime Minister Gordon Brown is to be a keynote speaker.

While growing demand is highlighted along with the need for greater investment in refining capacity, some nations want to blame market funds that speculate on oil futures for the rise of oil to almost 140 dollars a barrel, officials said.

A working paper for the summit's final declaration, obtained by AFP, calls for action to "improve the transparency and regulation of financial markets through measures to capture more data on index fund activity and to examine cross exchange inter-actions in the crude market."

A senior international energy official involved in the summit talks called the document "highly controversial" because of the attack on markets.

The document says that index funds and other investors have "unrealistic assessments" of the future value of oil.

The senior energy official said that the attack may be toned down in the final document of the Jeddah Energy Meeting on Sunday because of opposition from the United States and other major industrial powers.

Saudi Arabia is believed to be a supporter of the movement to put pressure on market players.

Ibrahim Al-Muhana, a top advisor to Saudi Arabia's oil ministry, told a press conference in Jeddah on Friday: "The emergence of new players has made it difficult for us to put our fingers at a clear reason" for the price rise.

Saudi media quoted him as attributing the rises to increased market speculation on oil.

The oil powers have sought to divert consumer calls for greater production to counter the energy inflation, despite Saudi Arabia's promise to produce an extra 200,000 barrels a day.

Organisation of Oil Exporting Countries (OPEC) president Chakib Khelil said "just because car and computer prices were high, would one ask their producers to make more?"

The summit document calls for improved information gathering by groups such as OPEC, the International Energy Agency (IEA) and the International Energy Forum (IEF) "to improve transparency" and better assess "the impact of financial markets on the level, volatility of oil prices which can be used to better understand the market situation."

The different forecasts on production and consumer needs produced by the different groups "send mixed signals to the market," fuelling fears about oil supplies, said the international energy official.

The draft calls for international action for "reducing uncertainties" and "necessary actions to ensure stability and sustainability of the energy system."

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