Naimi said "Today, the oil industry is confronted with faltering demand and significantly lower prices. This contrasts with the market psychology we witnessed just a year ago, when the widespread perception of supply shortages and the fear of disruptions fueled speculation which played a significant role first in pushing oil prices to record highs and then in accelerating their subsequent collapse. The extreme volatility we experienced is detrimental to our goal of establishing secure and stable energy markets. It discourages the smooth flow of capital into the energy sector and in doing so, undermines our collective energy security. That is why consuming and producing countries need to intensify the efforts to better understand the workings of oil markets and to improve their transparency. Together, we must also consider whether an expanded role for governments in regulating these markets is warranted to combat practices that undermined transparency and foster the types of extreme volatility that can destabilize our energy future. We are pleased that the high-level Steering Group working with the International Energy Forum is studying this issue and will present their findings at the upcoming Ministerial Meeting in Mexico. In order to meet future energy demand, all BTUs, regardless of their source will be needed. The world does not have the luxury of discarding any particular energy source, whether oil, nuclear or coal. The effect of such an approach could be disastrous to global prosperity and the economic aspirations of the developing world. Ultimately, technology and the market place should determine the winners and losers, not governments. We may find that the optimal solution is not only the type of energy we use, but how we use it. Fossil fuels will continue to serve as the “base load” for meeting growing world energy demand for decades to come. Amid the excitement over the potential of alternative energy technologies, we cannot lose sight of basic economic realities and the need to maintain a robust and reliable energy system. There is a finite amount of capital available for energy investment, and as such we should employ it where we can reap the most benefit for the least cost. And last but not least, we must redouble our efforts to deepen dialogue and improve cooperation between producers and consumers. We can build on ongoing initiatives being coordinated by the IEF, including the Joint Oil Data Initiative (JODI) and other efforts to improve oil market transparency and reduce price volatility, including the high-level Steering Group initiative now underway."
