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Oil market tightening says Saudi minister

Vienna, March 16, 2010

There are signs of increasing demand for oil, Saudi Oil Minister Ali Al-Naimi said on Tuesday, which could mean Opec does not have to take any action on supply this year.

'We have been sailing very well and we will continue to sail very well,' Al-Naimi, minister for the world's top oil producer, told reporters a day ahead of a meeting of the group, many of whose members have voiced concern it is pumping too much oil.

Kuwait's Oil Minister Sheikh Ahmad Al-Abdullah Al-Sabah said on Tuesday compliance was 'the major issue.'    

Angola's Oil Minister Jose Botelho de Vasconcelos said his country might ask to be exempt from its output quota as it continues to produce above that level. But Al-Naimi is more relaxed about overproduction.

'Compliance is there,' he said on Monday. 'The market is happy , there is balance, there are no shortages, there is enough investment going on,' he added.

He said he did not think there would be a need for any additional Opec meetings this year.

Opec is due to meet in September and December.

Algerian Energy and Mines Minister Chakib Khelil said on Monday Opec could wait until the second and third quarters to deal with the demands of a recovering economy.

'The economy is looking like it is recovering,' Khelil said. 'I expect prices to hold pretty well until the end of this year despite the surplus in supply,' he told reporters.   

Al-Naimi said on Tuesday Opec would not reduce supply if it meant prices could be driven too high. 'We will never allow tightening that will put pressure on prices,' Al-Naimi told reporters on Tuesday.   

Oil prices are within a range which Al-Naimi has described as comfortable for producers and consumers even as Opec pumps more than its 24.84 million barrels per day (bpd) target.

Benchmark US crude futures steadied just shy of $80 per barrel on Tuesday, after a fall of nearly 2 percent on Monday triggered by dollar gains and worries that China might tighten credit further. - Reuters




Tags: Saudi | Opec | Crude | Al-Naimi | oil market |

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