Britain pushes for greater transparency in oil markets

The Associated Press

Oil-producing companies and countries must be more open about their reserves, revenues and production to prevent high and volatile crude prices, British Treasury chief Gordon Brown said in remarks released in advance of the Group of Seven industrial nations meeting Feb. 4-5.

Brown, who is hosting the meeting of G-7 finance ministers, urged oil producers to remove barriers to oil investment to ensure that future supplies will be sufficient to meet demand at reasonable prices, the British treasury said.

Brown said high and volatile oil prices are a risk to the world economy and action is needed for sustained and stable economic growth, the treasury said.

A lack of transparency in the oil markets has been blamed in part for the surge in crude oil prices, which hit record highs in late October above US$55 a barrel. While they have since dropped back, closing below US$47 a barrel Feb. 4, they remain roughly 35 percent higher than a year ago.

The Organization of Petroleum Exporting Countries said at the end of January that it expects prices to stay high for at least the next few months.

Brown urged the G-7 nations — the United States, Britain, Canada, France, Germany, Italy and Japan — to put pressure on the International Energy Agency to prioritize the development of a new database, the Joint Oil Data Initiative, the treasury said.

The IEA initiative will provide data on supply, demand and inventories representing around 95 percent of global oil production and supply.

Global oil markets currently take much of their direction from supply data released weekly by the United States, the world’s largest consumer of crude, and on monthly supply, demand and stock reports from the IEA.

Brown called on oil-producing countries and oil companies to provide transparent information on oil revenues and to ensure the necessary systems are in place to allow them to do so. He also urged countries with oil reserves to develop wider supportive conditions for investment, the treasury said.