The Organisation of Petroleum Exporting Countries (opec), which agreed at its 151st extra ordinary meeting held in Algeria on December 17 to cut 4.2 million barrels a day from the actual September 2008 OPEC-11 production of 29.045 mb/d, with effect from 1 January 2009, has made a strong pitch for improved transparency and regulation of financial markets.
The current global financial crisis has a compounded, adverse impact on commodity-exporting countries, in particular those whose economies are highly dependent on petroleum export revenues. The oil industry is now faced with a severe reduction in oil demand, due to the financial crisis that has its roots in the industrialised world. This is happening at a time when large new capacities are being put on stream in Opec member countries. They were built, or planned, at a time when costs were very high and they are now in danger of being left unused or delayed. Opec?s stand was explained by the secretary general Abdalla Salem El-Badri in his speech at the London Energy Ministers? meeting held on Saturday. Today, the financial crisis, triggered by the sub-prime mortgage difficulties in the US, is taking its toll.
The world economy is dramatically slowing and, in some regions, even entering into deep recession.These recent developments amplify the concerns expressed in Jeddah regarding the impact of unguided financial markets on the price of oil and its volatility. Now, there is a sense of urgency to the Jeddah Statement?s call for improved transparency and regulation of financial markets,? El-Badri said.