Consumers and producers see end to conflict on oil prices

Published November 20th, 2000 - 02:00 GMT

Oil consumers and producers hailed an end to confrontation over oil prices on Sunday, but admitted that their entente at a major oil forum in the Saudi capital lacked any concrete applications. 

 

"I think a consensus is emerging, that confrontation is over," US Energy Secretary Bill Richardson said on the final day of the 7th International Energy Forum in Riyadh."Several producer and consumer countries said that," he told journalists. 

 

Richardson, representing the world's biggest oil consumer, underlined that both sides had begun to reach common ground, dubbing the talks between more than 400 delegates "very productive". 

 

Qatar's Oil Minister Abdullah Hamad al-Attiyah praised US support for a "reasonable" oil price as a first and "very positive". 

 

Richardson called Saturday for oil at $20-25 a barrel after months of record high prices and warnings of damage to the global economy and particularly to developing nations. 

 

And France's Industry Minister Christian Pierret, whose country holds the rotating Europen Union presidency, told AFP that $25 was a "reasonable" price. 

 

"It's the first time we hear a major consumer talking about prices," Attiyah noted of Richardson's comments, referring to the West's traditional demand to let the markets decide. 

 

"It is very positive. Consumers are putting something on the table," he told reporters in the capital of the world's biggest producer and exporter. 

 

The producer-consumer dialogue had taken place in a "very good atmosphere" and an understanding was being built, Attiyah added. 

 

However as delegates queued up to praise progress made through dialogue, OPEC President Ali Rodriguez was more cautious. 

 

"I don't believe that this forum will arrive at an agreement to stabilize the market," he said. "But I believe that we're going further (than the last forum) to stabilise the market." 

 

Attiyah said a range of $25-28 a barrel would enable greater investment in producing nations and thereby better supplies. 

 

However he added that the problem remained "how to create a mechanism" for oil to move within an agreed price band. 

 

Pierret had noted that $25 a barrel would "encourage companies to invest in creating the production capacity required," and "not block the road to economic development by the emerging countries." 

 

Saudi Oil Minister Ali al-Nuaimi urged ahead of the three-day forum for consumers and producers to agree a price band, but delegates said it would not be possible during the meeting, which was to close later Sunday. 

 

Producer countries have repeatedly complained that they are being blamed for high oil prices at a time when factors other than supply are influencing the markets, 

and consumers have demanded that producers pump more oil into the markets to calm soaring costs and reduce the risks of inflation. 

 

Nuaimi, playing Saudi Arabia's traditional role of moderate, made it clear in comments to be published Monday that a majority of OPEC member states have not ruled out further production increases before their next meeting on January 17 in Vienna, if justified. 

 

"I do want to repeat that there has not been a conscious decision that nothing is going to be done even if prices get out of hand or go haywire for any duration of time," he told the Middle East Economic Survey (MEES). 

 

Nuaimi was referring to the cartel's meeting on November 12-13 when ministers agreed not to put any new supplies onto the market, despite high prices stuck well over $30 a barrel. 

 

He told the Nicosia-based specialist newsletter a majority believed there was "plenty of crude on the market" after the cartel boosted production by 3.7 million barrels per day this year as the markets roared and consumer nations demanded more and more supplies. 

 

MEES said all the signs were that "price volatility will last throughout the winter before prices fall away in the spring."—AFP. 

©--Agence France Presse. 

 

© 2000 Mena Report (www.menareport.com)

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