The global oil market looks balanced, Saudi oil minister Ali al-Naimi indicated on Sunday, while the head of the International Energy Agency (IEA) said stubbornly high oil prices could harm economic growth.
When asked how he sees the balance between global supply and demand, the oil minister of the world’s largest crude exporting country asked the reporter’s view of the oil market.
The reporter replied that he believed the market was balanced, to which Naimi said: “I agree with you.” “Everything is fine now,” he said on the sidelines of a conference in the Saudi capital Riyadh when asked about the outlook for oil demand.
About 60 percent of Saudi crude is exported to Asia, where demand for fuel remains strong despite growing concern about the euro-zone crisis eroding demand in Europe. Saudi Arabia, Kuwait and the United Arab Emirates have raised their production over the last few months to compensate for the loss of Libyan supplies and prevent high prices dampening economic growth after failing to convince the 12-member Organization of the Petroleum Exporting Countries to lift its production target in June.
Libyan oil output has since resumed and risen more rapidly than many expected, prompting OPEC price hawk Iran to call for Gulf Arab OPEC producers to cut to pre-Libya crisis volumes. Naimi said on Sunday it was too early to predict what might happen when OPEC next meets in Vienna on Dec. 14. But in the past Saudi Arabia has not changed its production policy when Naimi has said he sees the market as balanced.
The head of the International Energy Agency (IEA) said at the same conference on Sunday that high oil prices – which have remained above $100 a barrel for benchmark Brent crude since February – could hurt the fragile world economy.
When asked whether he shared the UAE oil minister’s view that prices of $80-$100 a barrel are “reasonable”, Naimi said crude prices are determined by the market and that Saudi Arabia accepted them.
ICE Brent crude prices settled at $107.56 a barrel in London on Friday, down from $118 during OPEC’s June meeting, but on course for an all-time record high for the year.