World oil power Saudi Arabia hosts Friday a major forum of producers and consumers seeking a deal on a price range as the cost of crude remains dangerously high.
Saudi Oil Minister Ali Al-Nuaimi set out the objective in comments on the eve of the 7th International Energy Forum which has gathered the senior players of the global petroleum game.
"During the forum we hope to reach an understanding on a price range," to suit both producers and consumers, Nuaimi said, adding nonetheless that it was not time for OPEC to boost output.
European sources said the 11-member oil cartel will propose during the three-day forum a document setting a reference price of $20-23 a barrel for the period 2000 to 2010.
This is $10 a barrel under current highs and at the bottom of the cartel's 22-28 dollar price band mechanism. US benchmark crudes dipped more than 60 cents to $34.50 a barrel in Singapore on Friday ahead of the Riyadh meeting.
Both consumers and producers come to the meeting having declared support for a reasonable price to enable oil states to develop and consuming nations cope with costs of such a vital resource. The 21-member APEC (Asia Pacific Economic Cooperation) threw its weight behind calls for oil price stability at a summit which ended Thursday.
"We call for appropriate measures to promote stability in the mutual interests of consumers and producers," an APEC declaration said. APEC expressed fears for the world economy from price volatility.
One of the leading voices of the consumer nations, Robert Priddle, executive director of the Paris-based International Energy Agency, arrived in Riyuadh with a warning of damage to the world economy.
"I think both producers and consumers think this is not a desirable level of price. It's too high and it will damage the world economy and in time damage the interests of oil producers," he said.
And he offered unexpected support to producers, who have been widely blamed for soaring prices. Priddle noted that high prices were a result of market tensions rather than supply shortages.
Algeria's Energy Minister Chakib Khelil underlined support for a price of about $25 a barrel.
Saudi Arabia has pointed the finger at massive taxes imposed on oil products by western governments for the high price of crude.
This is expected to be debated in the forum, but western govenrments, notably Britain and France, have made it clear that whatever short terms measures may be applied for quick relief, the heavy taxes on petroleum will remain in force for the foreseeable future.
Also on the agenda, are the calls for oil-producing countries, especially in the Gulf, to open up to foreign investment.
The pace of Saudi Arabia's plans to allow oil majors into the upstream gas sector have slowed recently. Riyadh is due to announce the successful projects shortly. Nearly 400 delegates, including numerous oil ministers, from 42 countries were to attend the forum which aims to boost understanding between consumers and producers.
Organisations represented include the Organisation of Petroleum Exporting Countries (OPEC), the UN Development Programme, the World Bank, the International Energy Agency (IEA), the European Commission (EC), APEC and the Association of South East Asian Nations (Asean).
Crown Prince Abdullah Abdul Aziz was to open the three-day meeting in a grand hotel in Riyadh at about 1630 GMT. US Energy Secretary Bill Richardson, who has fronted demands for lower prices, was due to arrive shortly after the opening, organisers said.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)