SOUTH KOREA: Saudi oil minister says financial markets have fuelled oil price rally

Record ID: 343515

  • Title: SOUTH KOREA: Saudi oil minister says financial markets have fuelled oil price rally
  • Date: 16th May 2008
  • Summary: (MER-1) INCHEON, SOUTH KOREA (MAY 14, 2008) (REUTERS) SAUDI OIL MINISTER ALI AL-NAIMI WALKING OUT OF AIRPORT LOBBY AL-NAIMI WALKING WITH OFFICIALS AL-NAIMI GETTING INTO CAR AL-NAIMI IN CAR CAR LEAVING
  • Embargoed: 31st May 2008 13:00
  • Keywords:
  • Topics: International Relations,Energy
  • Reuters ID: LVA32T7L27UTUW8BCZB64BPZM4VO
  • Story Text: Saudi Oil Minister Ali al-Naimi and other OPEC ministers have regularly blamed increased speculative trading, the weakening U.S. dollar and other factors beyond their control for the rapid rise in oil prices.
    During a visit to Seoul on Thursday (May 15), al-Naimi voiced this opinion once again saying the dramatic increase in oil prices over the past five years are directly connected with financial market volatility.

    "The short-term oil price gyrations seen in recent years are more closely tied to the internal logic of the financial markets than to underlying supply/demand fundamentals," he said in a speech at Seoul National University in Seoul where he received an honorary degree.
    Al-Naimi said rapid developments in commodities markets also added to the volatility of oil prices.
    A lack of spare crude output capacity and tight refining capacity have helped fuel a six-year rally in oil prices to a record of near $127 a barrel this week.
    The Minister also said Asia's oil consumption was expected to rise by 20 million barrels per day, driven by strong economic growth, and would account for 60 percent of the expected increase in global oil demand by 2030.
    Al-Naimi said the global economy is resilient to cope with rising oil prices as it has become more energy efficient, while global supply of crude oil will be backed up by increased reserves of 1.2 trillion barrels versus 667 billion barrels in 1980.
    Consumer nations have called on OPEC to ramp up production to help ease the sting of high fuel prices, but most members have resisted, saying that markets are well supplied and stocks ample.
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