"The London meeting represents the next step in international dialogue between major oil producing and consuming countries," said the British Department of Energy and Climate Change (DECC) on Tuesday.

Friday's meeting follows the Jeddah summit back in June and will discuss the impact of the financial crisis on energy investment.

Iran's Oil Minister Gholam Hossein Nozari is also among those being invited to the London Energy Meeting.

Nozari is now in Algeria to participate in an emergency meeting of OPEC aimed at stabilizing the oil market by reducing production up to two million barrels per day.

The London meeting will be chaired by UK Energy and Climate Change Secretary Ed Miliband followed by the Saudi oil minister and representatives of OPEC.

It will also be attended by a small selection of national and international oil companies, banks and other relevant organizations such as the World Bank.

British Prime Minister Gordon Brown earlier said the objective of the London meeting will be to "enhance the dialogue between the major oil producing and consuming countries, in order to improve the functioning of the oil market."

The Jeddah meeting was held in a background of oil price reaching record levels approaching nearly 150 dollars per barrel (dpb), but prices have since fallen back to below 50 dpb for the first time in three-and-a-half year due to the world economic crisis.

OPEC output cut to help stabilize market: Nozari

The Iranian minister is currently in Algeria to attend the formal meeting of the Organization of the Petroleum Exporting Countries (OPEC) due to start in the city of Oran on Wednesday.

"Otherwise, the oil market will face a more severe situation where both producers and consumers would lose in the long term," Nozari told IRNA.

Asked about the commitment of the OPEC member states to the output cut since November 2008, he said the OPEC Secretary-General Abdullah al-Badri would brief the audience on the issue during the meeting.

On Iran's commitment to reduction of 199,000 barrels decided by OPEC since the beginning of November 2008, he said the Islamic Republic of Iran has fulfilled all its commitments as per the OPEC decision to keep its output at the level required by the organization.

CGES further downgrades oil price forecast

Last month, CEGC predicted in its reference case that Dated Brent would average 49.1 dpb next year, even with OPEC reducing its output to 29.7 million barrels per day (mbpd) from an average of 32.3 mbpd in 2008.

But in its latest oil report, it suggested that rates would drop to an average of only 34.3 dpb in the first quarter of 2009 with OPEC producing even an average of 29.1 mpd for the year. It saw lesser of a recovery in prices in the second half.

"Next year is set to be a tough one for the world economy and this pessimistic view is reflected in our bleak outlook for global oil demand," the report said, putting it at 85.3 mbpd and doubling last month's decline forecast.

It forecast that Dated Brent would struggle to reach an average of 57.8 dpb in 2009, even with a stronger global demand of 86.1 mbpd compared with 85.8 mbpd for this year, which is predicted by the International Energy Agency.

"The key question on the oil market's radar screen right now is whether the oil price's collapse from its recent all-time highs is a temporary blip," the London-based centre asked.

The World Bank favours the view that it is the end of the upward phase of a normal commodity cycle, but many in the investment banking, mineral extraction and stockbroking communities are said to believe instead that the oil price fall is due to the slowdown.

CGES said that they are arguing that when the global economy picks up so too will oil prices, but it warned that they were forgetting that the demand for oil in the OECD countries started falling from 2006 as a result of higher prices before the recession.

... Payvand News - 12/16/08 ...

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