When OPEC controlled the price of crude oil  , all the Western opinion  protested violently . Eventually, OPEC receded, and accepted to price its oil   on the future market. But ,then, volatility ensued. The price moved not only because of the changes in the demand and supply balance of crude oil, but also, in a much stronger way , because of  the changes in the demand and supply of risk capital.  Speculation peaks reached not long ago the 100 dollar barrel, but those who complained soon realised that were accusing the very basic structure of the capitalist economy,  that is, financial speculation, and the protests subsided quite fast. 

The problem has .however,  been considered relevant enough to be  studied in detail, among others,  by the French Government , who   created a “Working Group on Volatility of crude oil price” which has  published in February a large, and  quite  complete document titled “Report du Group de Travail  sur la Volatilite’  de Prix du Petrole,  sous la presidence  de Jean-Marie Chevalier”.  It was prepared by Ministerial people , with almost no contact with oil  companies , and without consulting OPEC; its conclusions have been written having in mind  France’s Foreign Policy.

The Rapport clearly states that the volatility of the oil  price comes from a “complex interaction” between physical and financial factors ; and goes on saying that  the reforms proposed up to now to reduce the latter  are difficult to apply  and are  severely disliked by the financial world . The risk of a serious crisis is therefore permanent. The study concludes with three recommendations: a stronger dialog between oil producers and consumers ; a stricter regulation of both the financial and the physical market; the definition of an effective  European oil strategy.

The study goes on to state that , given the difficulties of the present situation,  in which we need to produce more  energy  for the poorer countries ,  but we also need  to reduce  emissions,  France should  launch  a new  “oil diplomacy”  with the immediate  objective  to  publish more transparent  oil data by  creating  a larger and more effective data bank on  such matters; and to stimulate  the international  initiatives of the International Forum for Energy (a body that  up to now has not fully  justified its  existence). On the European level, the study talks about preparing “European oil scenarios”; paying  a greater attention to the working of the  financial market;  promoting the “harmonisation” among  countries  of the  fiscal take on oil products, and, in general,  a stronger cohesion of the various European countries.  Finally,  it recommends a stronger cooperation  of Europe with the Southern Countries, who  try to reduce both their dependence from oil, and the damage created by volatility of its price.  Those points do not seem really new, but it has been  the first time in recent years that an European Government   tries  to define a strategy  in such a delicate area,  and chooses  to do so   by publishing  a quite prestigious research paper.