RIYADH: Global oil prices are expected to continue to stabilise in 2011, Saudi Arabia's oil minister said on Monday, Jan 24, but expressed concern over market speculation, which he said was driving the prices away from fundamentals.
"I expect prices to continue to be stable at last year's rates (levels)," Ali al-Naimi, OPEC's most influential minister, told an industry conference.
"The only thing that I'm concerned about is the pressure excerted by speculators, analysts and some investors in the futures market on prices to push them up or down away from market fundamentals," he said.
Global oil prices have been rallying since late last year, with Brent oil hitting a 27-month high earlier this month, nearing the key level of $100 a barrel which analysts polled by Reuters see as an imminent target.
Oil price stability lay at the heart of Saudi Arabia's oil policy, Naimi said, adding that this policy involved two points.
"The first is the supply and demand balance and the availability of an appropriate commercial stocks... And the second is oil price stability at rates that do not adversely affect the global economy growth rate, particularly in developing countries," Naimi said.
Prices had stayed within a range of $70-80 a barrel in the second half of 2011, a level that Saudi Arabia, the world's largest crude oil exporter, had said it preferred.
Naimi did not spell out a preferred price level on Monday, but said the price levels should also generate appropriate revenues to producing countries.
"It is assumed that such price levels will provide oil companies, irrespective of ownership or size, with appropriate returns to continue to invest in all phases of the petroleum value chain," he added.
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DEMAND HIGHER IN 2011, 2012
Naimi declined to say whether Saudi Arabia's production was in line with its OPEC quota after a recent report from the International Energy Agency (IEA) that the OPEC leader was making more crude available to the market. [ID:nLDE70H1EZ]
"What is the relation with the IEA, they say what they say," Naimi told reporters. "I will not answer these questions because we have established a system by which you can find all the information," he said.
Saudi Arabia's spare oil capacity was set to be around 4 million barrels per day this year, Naimi said, adding he expected overall OPEC's spare capacity to stay at around 6 million barrels per day.
He said non-OPEC countries were likely to continue to boost their output, but at a lower pace compared to previous years. "This will give OPEC the opportunity to boost supplies to the global market."
Analysts see prices picking up on the back of strong demand for oil, particularly from emerging countries, a theme Naimi also highlighted.
"Global oil demand is expected to rise between 1.5 million to 1.8 million barrels per day this year," he said, adding this increase would mainly be driven by Asia; particularly China and India, the Middle East and Latin America.
"The year 2011 might mark an important turning point in this direction as the level of oil demand in the emerging economies and developing countries is nearing demand in OECD countries and will even exceed demand in OECD by 2013," he added.
Thanks to its robust demand, Asia was now Saudi Arabia's main export market, Naimi said, representing about 60 percent of the kingdom's oil exports.
"(This is) a percentage that is expected to rise during the coming years," Naimi said. - Reuters
"I expect prices to continue to be stable at last year's rates (levels)," Ali al-Naimi, OPEC's most influential minister, told an industry conference.
"The only thing that I'm concerned about is the pressure excerted by speculators, analysts and some investors in the futures market on prices to push them up or down away from market fundamentals," he said.
Global oil prices have been rallying since late last year, with Brent oil hitting a 27-month high earlier this month, nearing the key level of $100 a barrel which analysts polled by Reuters see as an imminent target.
Oil price stability lay at the heart of Saudi Arabia's oil policy, Naimi said, adding that this policy involved two points.
"The first is the supply and demand balance and the availability of an appropriate commercial stocks... And the second is oil price stability at rates that do not adversely affect the global economy growth rate, particularly in developing countries," Naimi said.
Prices had stayed within a range of $70-80 a barrel in the second half of 2011, a level that Saudi Arabia, the world's largest crude oil exporter, had said it preferred.
Naimi did not spell out a preferred price level on Monday, but said the price levels should also generate appropriate revenues to producing countries.
"It is assumed that such price levels will provide oil companies, irrespective of ownership or size, with appropriate returns to continue to invest in all phases of the petroleum value chain," he added.
''
DEMAND HIGHER IN 2011, 2012
Naimi declined to say whether Saudi Arabia's production was in line with its OPEC quota after a recent report from the International Energy Agency (IEA) that the OPEC leader was making more crude available to the market. [ID:nLDE70H1EZ]
"What is the relation with the IEA, they say what they say," Naimi told reporters. "I will not answer these questions because we have established a system by which you can find all the information," he said.
Saudi Arabia's spare oil capacity was set to be around 4 million barrels per day this year, Naimi said, adding he expected overall OPEC's spare capacity to stay at around 6 million barrels per day.
He said non-OPEC countries were likely to continue to boost their output, but at a lower pace compared to previous years. "This will give OPEC the opportunity to boost supplies to the global market."
Analysts see prices picking up on the back of strong demand for oil, particularly from emerging countries, a theme Naimi also highlighted.
"Global oil demand is expected to rise between 1.5 million to 1.8 million barrels per day this year," he said, adding this increase would mainly be driven by Asia; particularly China and India, the Middle East and Latin America.
"The year 2011 might mark an important turning point in this direction as the level of oil demand in the emerging economies and developing countries is nearing demand in OECD countries and will even exceed demand in OECD by 2013," he added.
Thanks to its robust demand, Asia was now Saudi Arabia's main export market, Naimi said, representing about 60 percent of the kingdom's oil exports.
"(This is) a percentage that is expected to rise during the coming years," Naimi said. - Reuters
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