France to propose G7 delegation to oil producers

20th September 2005, Comments 0 comments

PARIS, Sept 19 (AFP) - French finance minister Thierry Breton said Monday he would call for a Group of Seven delegation to visit oil-producing nations to get a better understanding of supply levels.

PARIS, Sept 19 (AFP) - French finance minister Thierry Breton said Monday he would call for a Group of Seven delegation to visit oil-producing nations to get a better understanding of supply levels.

Breton said the proposal would be put forward at a meeting this week end in Washington of finance chiefs from the Group of Seven and had the support of his British counterpart Gordon Brown.

"Gordon Brown and I, we want to discuss clearly with our colleagues the need to send a G7 delegation to do a tour of producing countries to see how we can have greater visibility on these markets," Breton told a gathering of Anglo-American journalists here.

The G7 groups Britain, Canada, France, Germany, Italy, Japan and the United States.

Breton said inspectors would analyse the output levels in oil-producing countries, which are currently difficult to determine and invite speculation from investors.

"Today we do not have enough visibility on constantly increasing demand and supply, which we have difficulty determining at a given moment. We need this visibility, if nothing else so that markets stop being hyper-speculative," he said.

Breton said investors who contributed to abrupt oil price fluctuations, voluntarily or otherwise, "should assume their responsibilities to reduce volatility".

Developing this idea, a source close to the finance ministry said France would propose greater regulation of the oil market at the G7 finance meeting, set to take place this weekend in Washington.

"The minister will want to speak with his colleagues about the fact that the oil market is not regulated and is therefore sensitive to the actions of speculators," the source said.

The source added: "The minister is very attached to the idea of thinking about the first attempts at regulating this market."

The role of speculators in the dramatic rise in oil prices is difficult to determine, but some commentators have pointed the finger at much-maligned hedge funds, investment companies specialised in the short-term buying and selling of financial instruments.

US business guru Steve Forbes, publisher of Forbes business magazine, said last month that he thought the oil market was a bubble waiting to burst because of speculative buying.

"I'll be blunt, there's hardly a hedge fund in North America that hasn't speculated on oil futures," Forbes said.

The Group of Seven countries account for half of global oil consumption.

Breton also said that oil companies needed to increase their refining capacity and oil-importing countries should start preparing for the "post-oil" era.

Copyright AFP

Subject: French news

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