APEC Nations Urge Stable Oil Prices
Sunday, September 10th 2000, 12:00 am
By: News On 6
BANDAR SERI BEGAWAN, Brunei (AP) â€” Fearing skyrocketing oil costs could sink world economic growth, finance ministers from 21 Pacific Rim countries sent a message Sunday urging the Organization of Petroleum Exporting Countries to stabilize prices.
The statement, part of a communique issued at the conclusion of a two-day meeting of ministers from the United States, Japan and other members of the Asia-Pacific Economic Cooperation forum, was released hours before OPEC talks in Vienna.
Taking into account the differences between oil producers like Indonesia and Mexico and importers, the ministers fine-tuned the statement until the final minutes of the meeting.
``We note the risks posed by oil price volatility to the world economic recovery and for developing economies that are heavily dependent on market conditions, and the need to stabilize prices at sustainable levels,'' the communique said.
``In light of rising world demand, we call for appropriate increases in supplies and other necessary measures to promote long-term price stability in the mutual interests of consumers and producers,'' it said.
Oil prices completely overshadowed the original agenda of the Asia-Pacific meeting, which was supposed to focus on banking and currency market reforms to prevent another financial crisis like the one that toppled Asian economies three years ago.
In Vienna on Saturday, oil ministers from Saudi Arabia and Iran â€” the top two exporters in OPEC â€” said they supported increasing output by 500,000 barrels a day, or 2 percent of group's official production level. The Saudis said that might be a minimum figure.
Energy analysts warn that markets need at least 800,000 fresh barrels a day to ease prices, which are at highs not seen since the 1991 Gulf War. Prices have surged from $10 a barrel to $35 in little more than a year.
Luc Rousselet, chairman of the APEC Financiers' Group, which advises the organization from a private sector perspective, told a news conference that the worst thing about the oil prices was their volatility.
``It seems that there is more or less a consensus that an acceptable price for the oil should be in the range of $25 a barrel,'' Rousselet said.
``Whatever the level of the oil price, the economies will adjust to that level,'' Rousselet said. ``Where they have a problem adjusting is when a commodity, in a year, varies. When the price triples, that is very negative for the economy and it's a problem.''
Even the United States, where stunning growth has fueled demand for imported goods that lifted many Asian economies out of recession, is not immune. Americans in northeastern states worry that low fuel inventories will cause home-heating costs to soar this winter.
The International Monetary Fund reports high oil prices could pose a major threat to Asia's fragile economic rebound.
Oil producers say that one reason for the sudden supply shortage has been the unexpected surge in growth in the United States and the nascent recovery of Asian economies that were flattened by financial crisis just three years ago.
The Asia-Pacific Economic Cooperation forum aims to achieve free trade and investment among its members by 2020.
The finance ministers meeting in this tiny, oil-rich Southeast Asian sultanate is a prelude to the post-U.S.-election summit, expected to be one of Bill Clinton's last forays abroad as president.
The group comprises Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.