British Prime Minister Gordon Brown said Friday that tempering the volatility of oil prices was a major challenge facing the world economy because market fluctuations hurt both producers and consumers.
‘Brown was speaking at the London Energy Meeting, where energy and oil ministers from 27 key oil-producing and consuming countries met to discuss the impact of the financial crisis on the global energy market Also attending were the head of the Organization of Petroleum Exporting Countries and representatives of the world’s leading oil companies. The event comes after Wednesday’s OPEC summit _ where oil producers agreed to slash production to support oil prices _ and follows a similar meeting in June in Jeddah, Saudi Arabia. At the time the price of oil was near a record high of over $140 per barrel, and talks centered on how to increase supply to keep up with demand. Times have changed. During the past five months, oil has lost all the price gains it made over the last four years. It was trading Friday just under $36 dollars a barrel, and Friday’s meeting is centered on how leaders can work together to avoid volatility and stop the price from further plummeting. A recent attempt at addressing the problem wasn’t successful. OPEC agreed Wednesday to cut a record 2.2 million barrels from its daily production as of Jan. 1. However, the price of oil has continued to slip since that announcement was made. One reason is oil-producing countries outside of OPEC, including Russia, haven’t agreed to the same cuts. When oil prices sink too low, oil-producing countries have less money to invest in production for the future _ creating the risk of a spike in prices down the line. “Wild fluctuations in market prices harm nations all round the world,” Brown said. “They damage consumers and producers alike.”