OPEC, Asia, Call for Curbs on Oil Speculation
Source: Associated Press, Diana Elias (4/26/09)
"Officials are concerned about another price spike once the world emerges from the global recession."
The call came during a one-day energy meeting in Tokyo to discuss volatility in the world oil market. Officials are concerned about another price spike once the world emerges from the global recession. The slowdown has sharply eroded oil demand and driven crude prices down about 65% from mid-July levels of $147 per barrel.
The drop in prices, while helping offset some of the pain from the financial meltdown, has undercut investments in the sector. That has led to the delay or cancellation of dozens of projects worldwide and sparked concerns of another oil price spike once demand rebounds.
"Adequate and continuous investment throughout the energy value chain is essential as a means to balancing supply and demand in the future," a statement issued at the end of the meeting said, according to Japan's Kyodo news agency.
The meeting brought together ministers from the 12 Organization of the Petroleum Exporting Countries and many of Asia's biggest oil consumers, such as China, India and Japan.
Even as officials warned about the dangers of falling investments, they also voiced worry about speculation in the market. Many in OPEC, including Saudi Arabia, had blamed last year's run-up in prices to almost $150 per barrel on speculators and hedge funds.
"In order to achieve a stable oil market, the influence of excessive speculative activities in the oil exchanges, which lead to price volatility, should be limited through more regulation and control," Hossein Noqrekar-Shirazi, Iran's deputy oil minister for international affairs was quoted as saying by Iran's Press TV.
Saudi Oil Minister Ali al-Naimi urged his colleagues to confront what he said was unfounded fears about supplies, adding that such perceptions had "largely contributed to skyrocketing prices, in the past," the official Saudi Press Agency reported.
OPEC, along with the International Energy Agency, has repeatedly warned about the dangers of falling investment in the oil sector. While many projects have been scaled back or delayed, many of its most influential members have said they are pressing ahead with oil investments despite the downturn.