Minister of Petroleum and Mineral Resources Kingdom of Saudi Arabia Ali Al-Naimi reiterated that oil producers and consumers share a common interest in promoting the stability of oil markets announcing that the kingdom has called for a meeting next month to sign the International Energy Forum's new charter. The minister made the remarks in a speech today at the Plenary Session of the Second Global Commodities Forum of the United Nations Conference on Trade and Development. Following is the text of the speech: Mr. Secretary-General of the United Nations Conference on Trade and Development, Supachai Panitchpakdi; Mr. Secretary General of the International Energy Forum, Noé van Hulst; Your Excellencies; Ladies and gentlemen: Good morning. Thank you for the kind invitation to offer my perspectives on petroleum to the global commodities debate. The United Nations Conference on Trade and Development and its partners perform a valuable service by convening this second Global Commodities Forum to bring reliable information and insightful interpretation to the dialogue on perennial market issues. It is my hope that this plenary session on energy markets will clarify the particular role of petroleum in the interdependent commodities markets. I will share my views on the current state of oil markets, and highlight some of the challenges and opportunities ahead, as we pursue further development of the global commodity economy, and mutual benefit for producers and consumers. Over the past several years, we have witnessed dramatic shifts in the global economy, and consequently in commodity markets, including oil. In today's globalized economy, these shifts underscore the interconnection of our fortunes, as was made starkly evident in the global economic crisis of 2008. As to the shifts in commodity markets, in recent memory alone, a single decade gives us a compelling snapshot of oil price volatility. Of course I am referring to the historic low of 1998, when the WTI crude-oil price pendulum swung from roughly an average of $11 per barrel - at that point, the lowest level in nearly 30 years - to the all-time peak of $147 per barrel in 2008. What is behind the roller-coaster ride that has taken oil prices from the depths of 1998 to the peak of 2008, followed by the subsequent collapse and eventual rebound in prices we are seeing today? I believe that it can be explained in part by the fact that in recent years, oil has become well established as an attractive asset class for a growing and diverse set of investors. This trend appears unlikely to abate any time soon. In fact, it will likely contribute to ongoing volatility as investor money moves in and out of oil futures markets based on a variety of factors which may have very little to do with basic oil market supply and demand fundamentals. Oil producers and consumers share a common interest in promoting stable markets and ensuring affordable and fair prices. Petroleum is a long-term, capital-intensive industry, with exploration, discovery and development taking long lead times of many years to bring to production. As such, adequate financial returns, stable prices, and transparency and predictability of future demand are needed. Wildly fluctuating prices are not conducive to future investments to ensure that crude oil, refined products and natural gas supplies are delivered when and where they are needed. --More
