Oil ministers, rattled by the wild ride of oil prices in recent years, are aiming for more talk and cooperation with fellow producers and a barrel price they can live with, as they meet today and tomorrow at the Mexican resort Cancun.
“The global market can only be affected through stronger dialogue, stronger cooperation,” said Noe Van Hulst, secretary general of the International Energy Forum (IEF).
If the oil prices move quickly, Van Hulst said, those involved simply need to talk more quickly to keep pace with the rise and fall.
Attempting to set a price is hardly surprising considering the extreme fluctuations of crude oil prices. The going rate has plummeted as low as $30 a barrel from $150, and now rests in the low $80’s.
Oil producers want to avert such price volatility, while preserving demand. Their rationale is to supply the market to the point that demand isn't pushing the price.
In line with that goal, producers have begun reviving some of the oil drilling projects that were shelved during the financial crisis, to provide them with enough of a cushion to protect the price in the $80 range.
However, can the oil producers control the price by having ample supply? It’s unlikely, say oil traders: They believe the going rate for crude will have more to do with the strength or weakness of the dollar and less to do with the supply-demand equation.