LONDON - BRITISH Prime Minister Gordon Brown said on Friday that oil price volatility was 'in no-one's interest' at a meeting of major oil producing and consuming nations, as prices hit a new four-year low.

Mr Brown urged stability after a year which has seen prices swing from record highs to historic lows as the credit crunch bites, adding that producers and consumers should move beyond their 'traditionally adversarial' relations.

But there is likely to be disagreement between oil consumers such as Britain and oil producers like Saudi Arabia over what is a fair price for oil.

Saudi oil minister Ali al-Nuaimi again indicated it thought US$75 (S$109) per barrel would be a fair price, adding that anything lower could lead to more, not less, instability.

The meeting comes after the price of crude oil in New York plunged to the lowest point for four and a half years at US$35.62 a barrel on Friday.

The price dropped despite the Opec cartel announcing a record output cut of 2.2 million barrels a day on Wednesday in an attempt to reverse the downward spiral.

Oil prices hit record highs above US$147 per barrel in July.

Mr Brown said that the world needed to work together to make sure that such surges and plunges were avoided in future.

'Such volatility is in no-one's interest. Wild fluctuations in market prices harm nations all around the world, they damage producers and consumers alike,' he said.

He also denied that a commitment to reducing oil prices was in conflict with commitments to tackling climate change, saying the two policies are 'complimentary'.

In response, Mr Ali - whose country is the world's biggest oil producer - pointed to a US$75 per barrel price as 'fair and reasonable'.

'It is the price that marginal producers need to maintain investments sufficient to provide adequate supplies for future oil consumption needs,' he said.

'When oil is priced lower, such as it is now, there will be less investment and less future supply.

'Eventually, this scenario is followed by a surge in prices, as supplies will not be sufficient to meet growth in consumption levels.'

This would lead to 'extreme swings,' he added.

The head of the Organisation of the Petroleum Exporting Countries, Secretary General Abdalla Salem El-Badri also sounded a warning over lower prices.

'Low crude prices do not translate into equal lower prices at the pump. The price that the end consumer pays comprises significant amount of taxation. This is especially the case in Europe and Japan,' he said.

He warned of cutbacks to spending on new oil projects because of the slump in prices and the credit crunch and a slowing in investment.

Mr Brown originally envisaged a conference of heads of state, but those plans were scrapped over whether to invite Opec leaders such as Iranian President Mahmoud Ahmadinejad and Venezuela's Hugo Chavez, who are shunned by London.

Britain eventually decided to hold the conference but to downgrade it to ministerial level. It is also being attended by Britain's Prince Andrew, a trade ambassador for the country.

Britain's Energy Secretary Ed Miliband told the Financial Times newspaper that Britain wants new rules to force greater disclosure by traders in the oil futures market - blamed by some for contributing to soaring oil prices.

'In other markets, there is greater transparency about people's positions and about the transactions that are taking place,' he said.

'Given that the oil futures has become more important to the oil price, it is important to look at ways to bring greater stability to the market with greater transparency.' -- AFP