SAUDI ARABIA: Current oil prices are 'reasonable' and the rapid rebound in Libyan crude output should see other OPEC members trim production says OPEC 's head

Record ID: 188853

  • Title: SAUDI ARABIA: Current oil prices are 'reasonable' and the rapid rebound in Libyan crude output should see other OPEC members trim production says OPEC 's head
  • Date: 21st November 2011
  • Summary: RIYADH, SAUDI ARABIA (NOVEMBER 20, 2011) (REUTERS) EXTERIOR OF THE RITZ-CARLTON HOTEL HOSTING THE 2011 ENERGY DIALOGUE VARIOUS OF LCD PROJECTOR SHOWING SAUDI KING ABDULLAH BIN ABDULAZIZ
  • Embargoed: 6th December 2011 12:00
  • Keywords:
  • Location: Saudi Arabia, Saudi Arabia
  • Country: Saudi Arabia
  • Topics: Business,Industry,Energy
  • Reuters ID: LVA6FQROC3WUHBTCAPEA7G1SR3JS
  • Story Text: Current oil prices are "reasonable" OPEC 's head said on Sunday (November 20), adding he expected the next meeting of the oil exporter group to be more amiable than the last one in June.
    Speaking at the Energy Dialogue 2011 conference held in Riyadh, Saudi oil minister Ali al-Naimi indicated the global oil market looks balanced. Naimi added that Saudi Arabia was entering a new phase in development.
    "We are now entering another important phase in the development of our country, it's an era of greater potential and challenges which are moving more towards building an economy that depends on knowledge, where the talents of our young men and women are united," he said.
    Speaking at the same conference in the Saudi capital with less than a month to go before OPEC meets, OPEC secretary general Abdullah al-Badri said the euro zone crisis was a major concern for oil producers and that OPEC members would have to make way for a rapid recovery in Libyan oil output.
    Badri confirmed that OPEC members who increased output in June to make up for the loss of Libyan crude production would have to make way for more Libyan crude on the market over coming months.
    "Libya is coming and coming (back) very strong and I think by year-end, six months time from the restart of production, they will reach 1 million (barrels per day), they are going towards that one million and of course the other members should give a space for them," he told reporters on the sidelines of the conference in Riyadh.
    Badri added there was no target set for the price of oil per barrel, but said current prices were reasonable.
    "It is everybody's guess (price of oil barrel) we don't have a target but the current price is reasonable."
    The head of the IEA said that high oil prices -- which have remained above $100 a barrel for benchmark Brent crude since February -- could hurt the fragile world economy and OPEC remains deeply concerned about the euro zone crisis impacting demand.
    "We have to wait, if this new government now in Greece and Italy will solve the problem then demand will increase. If they don't solve it, then there will be some effect, also China are reducing their growth now because of the inflation effect, I hope that the EU will solve those problems," Badri said.
    ICE Brent crude prices settled at 107.56 USD a barrel in London on Friday (November 18), down from 118 USD during OPEC's June meeting, but on course for an all-time record high for the year.
    Saudi Arabia, Kuwait and the United Arab Emirates (UAE) have raised production over the last few months to compensate for the loss of Libyan oil and try to prevent high fuel prices from hindering economic growth after failing to convince OPEC to lift its group production target in June.
    Oil output from OPEC member Libya has since resumed and risen more rapidly than many expected, while OPEC has trimmed its demand outlook, prompting OPEC price hawk Iran to call for Gulf OPEC producers to cut to pre-Libya crisis volumes.
    As most crude from the Gulf OPEC countries is exported to Asia, where demand for fuel remains strong despite concern about the euro crisis eroding demand in Europe, Saudi Arabia still sees robust demand for its barrels.
    Saudi Arabia, which produced about 9.4 million barrels per day (bpd) in October, has not changed its production policy in the past when Naimi has said he sees the market is balanced.
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