The world’s biggest energy sector forum — the 12th biannual International Energy Forum — opened on Tuesday urging oil producers and consumers to help prevent a repeat of the excessive price volatility witnessed during the economic crisis of 2008-09.
The two days of talks will conclude with the publication of a ministerial declaration, calling for price stability and transparency. The IEF is being attended by OPEC, whose member nations, and the International Energy Agency, which represents consumers as the energy-monitoring arm of the OECD grouping of the world’s 30 leading industrialised nations.
India is being represented at the two-day conference by Petroleum Minister Murli Deora. Deora said the wild swing of 2008, when crude oil prices rose to a record high of $147 a barrel in July before plummeting to under $33 per barrel in December that year, should be avoided at all costs.
“We need to take steps to curb speculation and reduce volatility in the market,” he said.
Sudden accelerations in oil prices hurt consumers like India because they cause inflation and reduce spending, curbing economic growth. On the other hand, a plunge in prices affects investment in future supplies.
Deora also favoured curbs on paper trading to check volatility in prices.
Welcoming any move to curb speculation, Saudi Arabian Oil Minister Ali al-Naimi said current prices were “perfect”. Saudi Arabia is the world’s largest producer and exporter of crude oil. “(Oil prices at) $ 70—80, that’s the most appropriate price,” he said. India has been, since 2007, blaming speculative trade behind the rally in oil prices, a point that Naimi accepted last year.
OPEC Secretary General Abdullah al-Badri said oil price between $70 and 80, where the fuel has held for much of 2010, was good for producers and consumers — high enough to promote investment in new projects, but not so much that it clips demand from large economies.
Disclaimer: For this story, the author’s travel, boarding and lodging was provided by ONGC Videsh Ltd.