Saudi hails 'perfect' price at Arab oil meet
Riyadh, December 5, 2009
Top oil exporter Saudi Arabia on Saturday described the current oil price as stable and 'perfect' for consuming and producing nations as he led talks in Cairo with other Arab oil ministers.
With oil around $75 a barrel, ministers said there was no need for the Organization of the Petroleum Exporting Countries to change its output targets when it met in Angola later this month.
'Everything is very good now,' Saudi Arabian Oil Minister Ali al-Naimi told reporters at a meeting of the Organization of Arab Petroleum Exporting Countries, which brings 10 producer nations, seven of which are also members of OPEC.
'Inventories are coming down, the price is perfect and investors, consumers, producers are all very happy,' he added. 'There is nothing to worry about.'
Opec has held its formal output targets steady all year following a decision announced last December to cut supplies by a record 4.2 million barrels per day compared with September 2008.
Oil prices are still far below the July 2008 peak of nearly $150 a barrel.
But given the delicate state of the world economy and the oil market's rebound from a low of just above $30 last December, the producer group may not need to raise output for a while, Algerian Energy and Mines Minister Chakib Khelil said. 'It will be a long time,' Khelil said.
Other Opec producers also attending the meeting said they expected the group to leave output unchanged when it next meets.
'Doing nothing is going to be the name of the meeting,' said the head of Libya's Opec delegation Shokri Ghanem.
A conference of the 12 Opec members on December 22 in Luanda will wrestle with the task of balancing oversupply against the risk any rise in oil demand could drive up prices and derail the world economy.
A huge welter of surplus oil, including millions of barrels in floating storage at sea, as well as brimming stores on land, could worry some in the group.
The other cause for concern is possible speculation in the market. Some analysts argue prices should be lower given the levels of excess oil, which could justify an increase in output to prevent the price rising to levels that could set back economic recovery and destroy demand.
OAPEC does not set policy for its members. A statement at the end of Saturday's meeting called for more cooperation between members and said ministers had discussed the effect of the global economic crisis on the oil market.
The seven members of OAPEC that also belong to Opec are Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia and the United Arab Emirates. Bahrain, Egypt and Syria are OAPEC's three other members.