Sentiments, speculation and rumours have been identified by the Organization of Petroleum Exporting Countries, OPEC, as some of the major determinants of developments in the global oil market.
OPEC’s Secretary General, Dr. Mohammed Barkindo, revealed this in a paper he presented at the Ninth IEA-IEF-OPEC Symposium on Energy Outlooks in Saudi Arabia.
According bto him, it was unfortunate that the oil market can be subjected to forces which are not often grounded in facts.
Barkindo said: “Unfortunately, the oil market can often be subjected to forces which are not grounded in fact, especially at times of disconnect between prices and market fundamentals.
“Sentiment, speculation and even rumours have been known to drive the market. The situation can be further complicated by computerised or automated trading, with algorithms, Big Data and AI playing important roles.
“Energy outlooks are an antidote for this post-factual age. Indeed, our common currency, as it were, is fact-based data. Our industry is currently under siege from multiple fronts. Yet, some of these comments have tended to mischaracterise our objectives and misrepresent market realities.
“A classic example of this is the persistent notion that oil is on the verge of demise. According to this belief, renewables are about to completely replace hydrocarbons and those who seek to discuss the nuances of this idea are downplaying the climate challenge.
“At OPEC, we are acutely conscious of the challenge of climate change. Our member countries continue to take appropriate policies, implement programmes and projects to tackle the challenges of climate change.
“At the most recent UN Climate Change Conference, COP24 in Katowice, OPEC reiterated that it remains fully engaged and supportive of the Paris Agreement.
“Indeed, some of our member countries heavily invest in alternative sources of energy. For example, Saudi Arabia plans to generate some 59 gigawatts (GW) of electricity from solar and wind by 2030, and eventually produce upward of 200 GW from renewable sources.”
Continuing, the OPEC scribe said: “However, this is not a race to renewables alone; it’s a race to lower greenhouse gas emissions. For this reason, OPEC emphasizes the importance of energy efficiency and its great enabler, technological innovation.
“Given how our industry can be mischaracterised, the need for dialogue is all the greater. Consider the Ancient Greek roots of the word: ‘dia’ meaning through and ‘logos’ meaning reason or speech. And reasoned discussion, based on factual analysis, is crucial in this age of ‘alternative facts.’
“Dialogue fosters transparency, which is another priority for our organisation. OPEC truly is an ‘open book.’ All our publications and data are available online, accessible via digital Apps to the general public free of charge.
“Dialogue and transparency are indispensable to the multilateral system. OPEC will always align with the values at the heart of the multilateral system and affirms absolute conformity between its activities and principles, and the ideals of the UN. We are an intergovernmental organisation which has been registered at the UN Secretariat since 6 November 1962.
“These noble principles manifest themselves in the historic new chapter heralded in the oil industry through the ‘Declaration of Cooperation’ process. A win-win situation has developed and made a substantial contribution to the synchronous global economic growth seen in 2017-18.
“Intensive discussions on further institutionalizing our cooperation are currently underway, as we finalize the draft ‘Charter of Cooperation.’
“Given the achievements to date, it is no wonder that all parties are enthusiastic to further cement our cooperation through a collaborative approach. Looking forward, there can be no doubt that with the GCEF, IEF, IEA and OPEC working together, guided by reason, supported by facts, we can continue to meaningfully contribute to the industry and the global economy.”
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