BERLIN, 21 April 2004 — Germany wants the International Monetary Fund to call for dialogue between oil producing nations and oil consumers in the light of the recent surge in oil prices, a government source said yesterday.
“There will certainly be a call for dialogue between producers and exporters so that OPEC is aware of its responsibilities for the world economy,” the source said yesterday ahead of the annual spring meeting of the International Monetary Fund in Washington at the weekend.
“From our point of view this has to be reflected in the IMFC statement,” the source said. The International Monetary and Financial Committee is the IMF’s policy-setting body.
The source noted the IMF mentioned oil prices in the statement issued after its meeting in Prague in September 2000, when high oil prices last posed a threat to European growth. “It’s in our interests this happens again,” he said.
In its Prague communique, the IMFC said: “The committee is concerned that current oil prices, if sustained, could hamper global growth, add to inflationary pressures and adversely affect prospects for many countries.”
It added: “The committee looks forward to improved dialogue between oil producers and consumers to promote greater oil market stability”.
Also in Prague, the Group of Seven rich industrial nations issued a more strongly worded statement calling on OPEC to “take actions” to bring down oil prices.
The source also said the government sees no need for any changes in the language on foreign exchange that the Group of Seven agreed at its February meeting in Boca Raton, Florida.
“I would say that from our point of view there’s no need to change the message that was given at Boca Raton,” a government source said. He said since Boca Raton “there’s been movement in the direction that was implied then.”
The Boca Raton G-7 statement said: “We reaffirm that exchange rates should reflect economic fundamentals.
Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to monitor exchange markets closely and cooperate as appropriate.
In this context, we emphazise that more flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms.”
Meanwhile, a senior analyst from the International Energy Agency (IEA) said yesterday Chinese oil demand in 2004 may rise by one million barrels a day or more in 2004 and continue at that rate for the next two or three years.
The forecast, from principal IEA analyst Antoine Halff, marks a big upward revision in the forecast for Chinese oil demand above official projections from the agency that monitors oil for the world’s industrialized powers.
Chinese oil demand is one of the leading factors keeping world oil prices close to a recent 13-year closing high for US light crude futures of over $38 a barrel.
Oil prices fell yesterday as traders anticipated another rise in US stocks that would assuage jitters about supplies amid tensions in the Middle East.
The price of benchmark Brent North Sea crude oil for June delivery fell 30 cents per barrel to $33.16 in late afternoon trading in London.
New York’s reference light sweet crude for May delivery was 22 cents lower at $37.20 in early deals.
Halff’s informal projection is also the first glimpse into IEA thinking on China’s oil consumption beyond 2004. His remarks also suggest the IEA is likely to have to revise up its latest official prediction for Chinese growth this year of 710,000 bpd.
In its Monthly Oil Market Report released on April 12, the influential IEA predicted Chinese oil demand would rise 12.9 percent in 2004 to 6.2 million bpd. The agency will not release official projections for 2005 until its early July report.
