An international energy conference ended in Saudi Arabia on June 22. Leading oil producer and consumer nations appealed for increasing the monitoring of crude oil futures market and the transparency of the oil market, prompting all countries to take viable, effective measures to stabilize the global oil market, and investing more in the field of crude oil and renewable energy production in a communiqué they signed.
At the meeting, Saudi Arabia announced a 200,000 barrel per day output increase as of incoming July, whereas Kuwait, one of the few OPEC members with spare capacity, will increase its oil output by 300,000 barrels per day starting mid-2009. These measures, nevertheless, failed to bring down global oil prices, and the price of crude soared to 138.14 dollars per barrel on June 23.
There are different views on the sustained high oil prices. The United States insists that the supply/demand imbalance has pushed up oil prices. Meanwhile, OPEC members and many developing nations stress that the massive inflows of speculative capital, the sustained devaluation of the US dollar and tense geopolitics situation caused oil prices to skyrocket.
The US dollar, a leading oil market instrument for settlement, has devaluated more than 40 percent after February 2002, and this undoubtedly forces up the global oil prices. Moreover, since early 2003, the total value of speculative capital on the crude oil futures market has risen from 13 billion dollars to the 260 billion dollars at present, and the excessive speculation has boosted the oil (prices) bubble.
At the same time, continuous upheavals in the Middle East and some African oil-producing countries, including the postwar turmoil in Iraq and Iran's unsettled nuclear issue have added much uncertainty to the global oil supply.
To date, soaring oil prices have given rise to global inflation, and inflicted a grave negative impact upon economic development and social stability worldwide. Fuel price hike first hit civil aviation, transportation and communication, and petrochemical industries, which all take petroleum oil as the raw material or fuel, and eventually led to the raised costs for the performance of the entire economy. Recently, oil-related strikes, demonstrations and protests have swept Europe and Asia, involving airmen, bus drivers, fishermen and other workers in these industrial sectors. In fact, in the wake of raising prices for million upon million of consumers across the world, sparking demonstrations have occurred in a number of countries.
From a perspective of beefing up the monitoring of speculative capital, the United States has gone into action. The U.S. Congress has held a series of hearings on the impact of speculators on oil and commodity prices since late May. And the U.S. Commodity Futures Trading Commission has begun an investigation into speculation of the crude oil futures trading market and announced a range of moves aimed at reinforcing the market supervision and regulation. However, the U.S also needs to actively check on the trend for the devaluation of the US dollar.
In order to "cool down" soaring oil prices, it is most essential to enhance international cooperation. To mend or patch up disparities between the suppliers and consumers on the issue of oil prices, it is imperative to resolve the contradictions of interest between the oil producer and consumer nations and set up a more rational global oil supply/demand mechanism. And the just-concluded world oil summit with the participation of major oil powers and consumer nations represents a beneficial try.
While attending the International Energy Conference in Saudi Arabia last Sunday or on June 22, Chinese Vice-President Xi Jinping called on nations to step up in-depth energy cooperation, exploration of clean energy and maintenance of a health energy market, to solve the current energy problems.
Xi called on all oil producer and consumer countries to negotiate and cooperate in in-depth energy exploration to meet the normal need for development. He also proposed to all nations to enhance the development, research and spreading of advanced energy technologies, and to build a global system of clean, economical and safe energy.
In addition, Xi called for the establishment of a favorable international environment for energy development and the advancement of technological copeation in the spheres of clean, new and renewable energies, so as to create a stable pattern of world energy production, transportation and consumption.
As for Western nations, they should increase their transfer of energy-saving technologies or expertise to developing countries, so as to help expand their economic growth with the least possible energy consumption.
By the People's Daily Online
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