"We will need a new partnership between oil-producing and oil-consuming countries," Brown said. "As with the global financial crisis, this global crisis in our energy markets cannot be solved by one nation or one continent alone." Brown originally called the meeting in June when oil prices were heading towards an all-time peak of more than $147 a barrel. Prices have dropped more than $100 since then as the credit crisis and recession have shrunk demand for fuel.
He told the meeting the dramatic spike in oil prices had "an enormous and damaging impact on the global economy" and cited a recent study which estimated "the high oil price took around $150 billion out of world economic output this year alone."
"But today with prices falling it is clear that our most pressing challenge now and for the future is oil price volatility. Such volatility is in no one's interest. Wild fluctuations in oil prices harm nations all round the world." Nobuo Tanaka, executive director of the International Energy Agency, said the need for dialogue between oil producers and consumers remained even after oil prices had fallen sharply.
"VOLATILITY HURTS EVERYONE" "The price decline ... has provided some welcome respite, a breathing space in these troubled economic times," said Tanaka. "But the need for dialogue remains just as strong." Saudi Arabian Oil Minister Ali al-Naimi agreed that oil price volatility damaged all countries.
"Instability and volatility in oil markets hurt everyone," he said, stressing that the recent sharp falls in oil prices to very low levels caused "havoc" with investment plans in oil producing countries and jeopardises future oil supplies. Naimi, representative of the Organisation of the Petroleum Exporting Countries' biggest oil producer, reiterated that $75 a barrel was a "fair and reasonable" price for oil. Benchmark US crude oil futures for January fell below $34 on Friday.
"It is the price that marginal producers need to maintain investments sufficient to provide adequate supplies for future oil consumption needs. When oil is priced lower, such as it is now, there will be less investment and less future supply." He said stable oil prices were essential to ensure long-term investment in the energy industry, adding "non-fundamental factors" such as rapid and substantial financial deleveraging had contributed to the sharp price falls of recent months.
Opec this week announced a cut in oil supplies to try to balance supply and demand and put a floor under sagging prices. Opec Secretary-General Abdullah al-Badri said investment was slowing across the whole of the energy industry: "We are already hearing about cutbacks to spending on new projects," he said.
Tanaka agreed: "We have seen a string of project delays and cancellations - the list is getting longer and longer by the day," he said. "If investment delays and cancellations persist a real risk of supply crunch will emerge which could choke off economic recovery once demand finally rebounds."
Consuming countries are trying to improve transparency in oil markets. An international task force is investigating commodities markets and is due to report in April next year. Britain's Financial Services Authority is also co-operating with US regulators to provide more data on commodity markets.