The OPEC cartel called on Saturday for tougher regulations to reduce the impact of speculative investment in the oil market, which it blames for the huge volatility in crude prices.
Oil peaked at a record high above US$147 in July but has since plunged back below US$80 a barrel as the financial crisis rocking markets slows economic growth and thus demand for energy.
“The world oil market has been increasingly affected by financial market shocks from outside the physical oil market,” OPEC spokesman Alipour-Jeddi told the IMF meeting in Washington.
“The recent wild [price] swings demonstrate the need for concerted action to reduce the impact of financial marketsm which are damaging for the oil industry, as well as the global economy as a whole,” he said.
“The existing regulatory framework has proved insufficient to properly contain the negative impact of speculative activity ... which highlights the need to consider further measures,” he said.
He specifically called for the tightening of regulation on speculative trading practices and an extension of US market monitoring.
As oil prices soared in the first half of the year, the US led a chorus of countries in the West wanting OPEC to increase output — which it agreed to — in order to ease the pain. As prices have since tumbled, some OPEC members, most recently Libya, have called on the group to cut output to support prices.
Meanwhile, Iran on Saturday called for stability in the oil market, saying the biggest challenge now was a decline in the demand for oil due to a global economic recession.
“We have to look for market stability because this matter is very important both for producers and consumers,” Iranian Oil Minister Gholam Hossein Nozari told reporters.
“Studies show that the current situation in the oil market is due to a decline in demand and the global economic conditions,” Nozari said.
Nozari said last week that it would be “unsuitable” for both producers and consumers for oil to dip below US$100 a barrel.
Iran, as OPEC’s second-largest oil exporter, has traditionally opposed any crude output increase by OPEC, arguing that it would cause a fall in prices.
It has also urged fellow OPEC members to respect their output quota to avoid a worsening of the oversupply.
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