Wednesday, March 09, 2011

Oil: Saudi Oil Minister Discusses Rise in Prices

His Excellency Minister Ali Al-Naimi, the Minister of Petroleum and Mineral Resources for the Kingdom of Saudi Arabia discussed recent concerns surrounding crude oil prices and reserves in an interview with the Saudi Press Agency. During the interview, he outlined the ways the Kingdom is working to ensure stability in the oil market and discussed the recent surge in prices.

Minister Al-Naimi stated that Saudi Arabia has 3.5 million barrels-per-day of spare crude oil production capacity readily available if necessary. In addition, he highlighted that the Kingdom can use various storage locations across the world to provide increased flexibility to meet additional requirements from the global market.

Regarding pricing, Minister Al-Naimi said recent crude oil prices are not supported by basic supply-demand balances and have more to do with financial speculation and unwarranted negative supply sentiment than industry fundamentals. In addition, he emphasized that at the present the market remains well-supplied.

Minister Al-Naimi concluded by listing the steps the Kingdom has taken to ensure continued stability in the petroleum market:

  • Supplied all of its customers' normal crude oil requirements.
  • Met all incremental demand from its customers.
  • Taken steps to develop a special crude oil blend which is closer in quality to the supplies which have been lost by utilizing mixes from its different fields which are lighter in API gravity and lower in sulfur content, helping to minimize crude quality concerns.
  • Stored additional quantities of crude oil at various storage facilities and increasing inventories in Sidi Kerir (Egypt), Rotterdam (the Netherlands) and Okinawa (Japan) to better meet any additional call on its production.
SOURCE Royal Embassy of Saudi Arabia, Information Office