By Clara Nwachukwu
The Minister of Petroleum Resources, Mrs. Diezani lison-Madueke, has argued that it is impossible to do away with speculators in determining crude oil prices at the international market.
The minister posited this while speaking with journalists on the sidelines of the just-concluded 5th OPEC International Conference, in Vienna, Austria.
She said, “As you know, we cannot run away from the oil commodities speculators and the futures market in terms of the oil prices.”
Against this backdrop, she noted that speakers at the seminar critically reviewed the situation with a view to making the world understand that there is no gain in pushing oil prices unnecessarily since it affected global economic growth.
Also speaking on the same subject, the Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Mr. Austen Oniwon, who was also part of the Nigerian delegation, noted that the incidence of speculation on oil prices is generating a lot of concerns.
He said, “You can see people who are not even in the oil industry coming to talk, so it is good for us to be able to perceive how other people are seeing the energy industry and what they think the future is likely going to be.
You heard the gentlemen who spoke and looked at the activities of speculation and speculators in the industry, this is becoming an increasing factor, and at times, you cannot relate the price of crude with the reality on ground, so speculators are becoming more and more important in the way we do our business.”
With regard to aligning such speculation with reality, Oniwon said it was impossible because oil is now being sold as a commodity, saying, “Speculation is business, and once a product has become a commodity, definitely speculators will wade in, and oil and gas have become commodities and you cannot stop it because it is an international way of trading in commodities.”
Notwithstanding the fact that speculation contributes to global economic instability, the NNPC boss insisted it cannot be done way with in view of global developments, adding that “The only time to stop it is if the whole world is at peace and there is no crisis. But there is always going to be crisis and people will capitalise on it.
“The way it goes is that if you perceive that a crisis is going to be major, then, of course, people will try to take a position. But if it’s a minor issue, nobody will talk about it. You can see everybody is looking critically at what is going to happen if the embargo on Iran continues.
That is almost above 3.6million barrels per day that will be taken out immediately, so speculators will wonder; is there going to be a shortage, if so, let me take a position on it. So you really can’t stop it, it’s a natural human reaction to a global event.”