Asian ministers urge investment, supervision for oil price stability+

TOKYO, April 26 Kyodo - Ministers from major oil producers and consumers in Asia and the Middle East called for efforts Sunday to stop falling investments in the energy sector while urging enhanced market supervision in order to prevent extreme volatility
in oil prices.

The 21 countries, including Japan, China, India, Kuwait and Saudi Arabia, which
account for some 40 percent of the global oil output and 30 percent of
consumption, also shared the concern that crude oil prices may surge again once
the global economy shows signs of recovery from the worst recession since World
War II.
''Participants affirmed that adequate and continuous investment throughout the
energy value chain is essential as a means to balancing supply and demand in
the future,'' said the chair's summary released after the Third Asian
Ministerial Energy Roundtable held in Tokyo.
The one-day meeting came as investment by oil exporters to boost output
capacity as well as demand for oil have been shrinking given the global
financial turmoil and following economic downturn.
Japan, a major oil importer and co-chair of the meeting, has warned that if a
global economic recovery induces growth in demand, it might cause a sudden
''supply crunch'' for energy.
''This meeting came at a very good timing,'' Japanese Economy, Trade and
Industry Minister Toshihiro Nikai told reporters after the end of the
conference. ''The (global) economy will sooner or later return to a track of
expansion and focus will shift to the issue of energy.''
''It's not desirable that producers and consumers remain in conflict over oil
prices at that stage,'' he added.
The volatility in the prices was also one of the main issues for the biennial
conference.
Prices of crude oil, which surged to some $147 per barrel last summer, are
currently around $50 a barrel due to weaker demand.
''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,'' the summary said, apparently referring
to hedge funds and other investors who tend to seek profits in a short term.
The nations expressed recognition of the recent discussions at the Group of 20
meeting of advanced and emerging economies on strengthening financial
supervision and regulation.
As for transparency of commodity markets and supervision of over-the-counter
markets, they ''appreciated national authorities' efforts, and called for
further harmonized actions such as introduction of position limits,'' the
summery also said without elaboration.
The countries welcomed the proposal by Japan that producers and consumers in
the region jointly work out oil supply-demand projections as a step to
stabilize energy markets. They are eyeing conducting a study and organizing
workshops toward that end.
Now oil producers and consumers ''are trying to get to be more frank,'' Qatari
Deputy Premier Abdullah al-Attiyah who served as chairman together with Nikai,
said at a news conference. ''We are in the same boat. We have to work hard to
be sure this boat is safe for travel. Otherwise, you'll never reach your
destination.''
The participants also confirmed they will play respective roles in pursuing
clean fossil fuel technology and in investing for the promotion of energy
efficiency and renewable energy resources.
After the round-table meeting was concluded, Nikai held bilateral talks with
Iraqi Oil Minister Hussain al-Shahristani and agreed to offer Japanese
assistance in areas essential to the recovery of war-torn Iraq, such as oil
development, electricity and agriculture, Japanese officials said.
Nikai also conveyed Tokyo's intention to accept business delegations from Iraq
while expressing hope that Japanese firms could join projects to develop oil
fields in Iraq, they said.
==Kyodo