Ministers participating in an energy roundtable in Tokyo may seek increased oversight of over-the-counter trades in oil and its derivatives, according to a draft of a statement to be released by the chairmen after Saturday's meeting. The document, which may change, calls for limits on speculative positions in oil futures. “The oil market needs transparent trading in an orderly manner,” said Ken Hasegawa, a commodity derivatives sales manager at Newedge in Tokyo. “Calls for reinforcement of trade regulations won't stop.” Meanwhile, Saudi Oil Minister Ali Al-Naimi said Saudi Arabia is producing less crude than its target and global stockpiles are likely to decline. The Kingdom is producing less than 8 million barrels of crude a day, Al-Naimi told reporters here, where he is attending a meeting of Asian energy ministers. Stockpiles “will come down eventually,” he said. US stockpiles have climbed to the highest since September 1990 even as Saudi Arabia leads the Organization of Petroleum Exporting Countries' efforts to implement a 4.2 million barrel a day reduction in oil output from the group's September levels OPEC needs to monitor the global oil market carefully to determine if it is oversupplied, Qatari Oil Minister Abdullash bin Hamad Al-Attiyah told reporters earlier. Asia's biggest oil users are meeting the world's largest producers in Tokyo to discuss ways to revive spending and ensuring stability in energy prices and supplies after the recession ends. Qatari Oil Minister Abdullah bin Hamad Al- Attiyah and Japanese Trade Minister Toshihiro Nikai are co-chairs. “Regarding transparency of commodity markets and supervision on over-the-counter markets, participants called for further harmonized actions such as introduction of position limits,” according to the draft statement. “Participants recognized that excessive fluctuations in oil prices are undesirable for both energy producers and consumers, and that financial markets have an impact on oil price formation.” OPEC unveiled a plan in January seeking regulations to cap speculative trading by investors who buy oil without planning to use it. Benchmark oil prices on the New York Mercantile Exchange soared to a record $147.27 a barrel on July 11 and have since plunged 65 percent to $51.55. The US Commodity Futures Trading Commission initiated investigation last year into the causes of oil price gains in an attempt to determine whether record levels were reached because of manipulation. At present, such limits on speculative positions exist only for agricultural products. The bill would also enhance the US Commodity Futures Trading Commission's oversight of credit-default swaps. The ministers may call on oil-producing and consuming countries to stem a decline in oil exploration and production. The International Energy Agency said falling investments may result in a global oil shortage by 2013. “I can't rule out the possibility of an oil supply constraint in 2013 and 2014,” IEA's executive director said.
