Oil ministers vow new IEF framework to check market volatility

Oil ministers from over 60 countries, representing both oil producers and consumers, today adopted a declaration at the 12th International Energy Forum (IEF) ministerial meet at Cancun, Mexico, which proposes to mitigate energy market volatility.

The declaration, issued on the final day of the two-day deliberations, calls for an enhanced dialogue between producer and consumer countries. The declaration approved an enhanced IEF framework to sustain and reinforce the commitment of producer and consumer states to the informal dialogue. It was decided to establish a new high level steering group of participating countries with a mandate to draft the IEF Charter.

"Energy markets should be as transparent as possible to enable their efficient and effective operation and timely and improved market related data should facilitate better understanding of market price behaviour and appropriate regulatory responses," the declaration read.

While IEF will have a neutral status, it would have an enhanced role in providing improved and expanded market data and compiling relevant analytical reports with respect to both the physical and paper oil market.

Further, IEF, the International Energy Agency and OPEC will increasingly share analysis of market trends and outlook.

The declaration also recognises the important role of regulations on market functioning and participants' behaviour.

It is planned to draft and approve the IEF Charter before March 2011 while the implementation of the new organisational setting is expected by March 2011 and beyond.