Oil market well supplied, intervention unnecessaryRIYADH: Major oil and gas producers and suppliers will sign here (today) Tuesday a charter primarily aimed at limiting price volatility and the role of speculators, officials said. The non-binding charter will be signed by 87 countries, representing 90 percent of global oil production and consumption, Prince Abdulaziz Bin Salman Al-Saud, Deputy to the Oil Minister, told a press conference Monday. The signing will take place at an extraordinary ministerial meeting of the Riyadh-based International Energy Forum (IEF) which will also discuss other issues like energy market regulation, outlook and transparency. “The meeting will tackle two key issues; short-term price volatility and long-term demand and supply,” of crude oil and gas, said Prince Abdulaziz, adding that the meeting will not discuss fixing a specific price. “It will not be a price band but rather a price framework,” he said and added that there is almost unanimous support for the initiative of King Abdullah, Custodian of the Two Holy Mosques, for a $70 to $80 a barrel as a suitable price. “Is it (the market) sufficiently supplied? The answer is yes,” Prince Abdulaziz said. “Does the situation warrant an intervention? I don't think so,” he added, when asked about concerns over oil being above $100 per barrel. Differences in price between the benchmark Brent crude and WTI indicate “something unusual about the market,” he further said. Stocks, meanwhile, are at a “very comfortable level” and the market remains sufficiently supplied, he added. In London, Brent crude for April delivery gained $2.37 to $104.89 a barrel on the ICE Futures Exchange. WTI for March delivery was up $4.03 to $90.23 a barrel in electronic trading on the New York Mercantile Exchange. IEF Secretary General Noe van Hulst said that the group's ministers agreed unanimously that sharp fluctuations in the market will be harmful. The meeting comes as economic recovery and violence in the Middle East have driven oil prices back to levels last seen before the 2008 global financial crisis with Brent crude soaring above $105 a barrel. At its previous meeting in Mexico in March 2010, the IEF agreed to step up dialogue with the aim of improving transparency on the energy markets so as to reduce price volatility. These objectives, members decided, should be enshrined in a charter and the meeting in Riyadh will endorse it. Oil prices, after tumbling through 2008 and into 2009, have picked up steadily as the global economy has recovered. Higher energy costs have begun to drive rising inflation. At the same time, soaring oil and other commodity prices have stoked suspicions that the markets are being driven by speculators rather than reflecting underlying demand and supply, prompting fresh calls for regulation. Last year, the IEF put this topic on the Riyadh agenda and it has become even more topical given the rise in the energy and other markets in the past 12 months. OPEC decided to keep its production target unchanged at its last regular meeting in December and is not due to meet again until June. Saudi Oil Minister Ali Al-Naimi last month said he expected oil at $80 a barrel in 2011, and said OPEC could raise output to meet an expected two percent increase in oil demand this year.
