Saudi oil minister Ali Ibrahim Al-Naimi said on Monday that the Gulf kingdom had "significant" spare capacity to help stabilize oil markets despite the prospect of continued volatility.
Saudi oil minister Ali Ibrahim Al-Naimi said on Monday that the Gulf
kingdom had "significant" spare capacity to help stabilize oil
markets despite the prospect of continued volatility.
"There is adequate spare capacity in the system, inventories in all key
markets are ample and there is significant spare capacity in
Saudi
Arabia
," Naimi told a U.N.
forum on commodities in
Geneva
.
"The kingdom realizes it has an important role to play in promoting
stability in world oil markets," he added, underlining its past impact in
working for a "well supplied and balanced" market.
"It is our ongoing policy to maintain at least 1 to 1.5 million barrels
per day spare capacity to use wherever and whenever it be needed. Today it
stands at about four million," the petroleum and mineral resources
minister said.
Naimi and a senior International Energy Agency official insisted there was
little reason that growing demand from
Asia
,
emerging nations and recovering western economies should outstrip supply and
spark a return to record prices seen in 2008.
"While there is reason to be vigilant about price, the current situation
is significantly different from 2008," Naimi said.
However, he claimed that recent shifts in oil prices had less to do with the
physical state of the market than "gyrations with the value of the
dollar" and the newly-established influence of speculative trading on oil
by derivatives traders.
IEA Deputy Executive Director Richard Jones warned that political turmoil in
the
Middle East
and
North Africa
was
one of the "key certainties" hanging over oil.
"I mentioned the strength of the economic recovery, demand being one of
those, but another one is the unfolding developments in the Mideast - North
Africa region at this time, and we're all watching those very carefully
obviously," Jones told the meeting.
Naimi reiterated that "a range of 70 to 80 dollars per barrels is an
appropriate price for oil."
World oil prices rose to near the 100 dollar a barrel mark on Monday on fears
that unrest in
Egypt
could
disrupt deliveries for the West through the
Suez Canal
.
OPEC secretary-general Abdalla Salem El-Badri said the cartel stood ready to
raise output should supplies be hindered.
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