June 24, 2008 - OPEC and the European Union met for high-level talks in Brussels June 24,
reiterating their mutual "concern" over record oil prices but failing to agree
on whether a supply/demand mismatch was to blame for the historic surge.
EU Energy Commissioner Andris Piebalgs, speaking before the start of the
fifth EU-OPEC Energy Dialogue meeting, said a major point of discussion during
the half-day talks would be the apparent disagreement between OPEC producers
and consumer countries over the reasons behind the 40% surge in oil prices
this year.
"The basic difference between us and OPEC countries is that they believe
it's mostly speculation, and my opinion is it's fundamentals which is why
prices are going up," Piebalgs said.
OPEC President Chakib Khelil, also in Brussels for the meeting,
reiterated the his belief that market speculation by hedge funds is partly
responsible for the oil price rises, which have sparked widespread protest in
Europe and unrest in many developing countries.
"Basically fundamentals, as far as we are concerned, even if they have
had an impact, they would not have such a substantial impact on prices as they
were in equilibrium," Khelil told reporters after the meeting. "Right now we
have more supply than demand, because demand has decreased."
In a joint statement after the meeting, the two sides agreed their mutual
interest in "stable, transparent and predictable oil markets" and agreed to
continue working their "constructive" dialogue at a further meeting in Vienna
in June 2009.
The Brussels talks were attended by OPEC president Chakib Khelil, the
group's secretary-general Abdalla el-Badri and OPEC's alternative president
Desiderio da Graca Verissimo e Costa.
The EU was represented by its energy commissioner Andris Piebalgs,
Slovenian energy minister Andrei Vizjak, whose country holds the current EU
presidency, and Jean-Louis Borloo, energy minister of France, which takes over
the EU presidency from the start of July.
OPEC secretary-general Abdalla el-Badri told reporters the market was
well supplied but there was little more the cartel
could do to bring prices
down.
"What can we do? The Saudis have already announced [an increase]. At the
end of the day, there is no shortage of oil, the market is full of oil," he
said.
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