Saudi’s Naimi says global oil supply plentiful, demand good

Global oil supplies are plentiful and demand is good, while buyers and sellers are happy with current prices, top exporter Saudi Arabia’s oil minister Ali Al-Naimi said on Tuesday.

“You know my desire is that people leave the market alone,” Naimi told Reuters in an interview in Seoul. “You know why? Because everybody now is happy with where the prices are. Nobody is complaining about high prices or low prices.”

“They are no longer sky rocketing or falling down. So I will really leave the market alone.”

The oil minister had identified $100 a barrel as a suitable price earlier in the year. Brent crude is currently trading above $108 per barrel.

Asked if he was concerned about next year’s demand growth because of the global economic uncertainty, Naimi said: “Mechanisms are working well. Supply is plentiful, demand is good.”

On the supply front, he noted high U.S. production along with a recovery in output from Iraq and Libya.
Last year, Saudi Arabia was pumping crude at an elevated rate, a step the kingdom had initially taken to plug the supply gap left from this year’s disruption to Libyan oil exports.
“The Kingdom produced a special blend of crude similar to Libyan oil to compensate for the gap in Libyan oil production and to meet demand,” al-Naimi told Al Arabiya in October 2011.
“In 2012, demand will increase to 1.1 million barrels, and will rise to 1.3 million barrels in 2013,” al-Naimi had projected.
But OPEC will likely cut its oil production next year as prices risk falling in reaction to higher output from top crude consumer the United States and amid a slowing of energy demand growth, analysts say.

The Organization of Petroleum Exporting Countries (OPEC) decided on Wednesday to hold its oil output ceiling at 30 million barrels per day, which stands about one mbd below the cartel’s actual production.
At a ministerial meeting in Vienna -- where OPEC is based -- its 12 member countries also chose to re-appoint Secretary-General Abdullah El-Badri to head the group for another year after failing to agree on a new leader.

“When you look at the price now, there is not concern at this time,” El-Badri told reporters at a post-meeting press conference in the Austrian capital on Thursday.

“I think the current price, at $110 (a barrel for benchmark Brent crude), is acceptable for both producers and consumers.”

OPEC said on Wednesday that “the biggest challenge facing global oil markets in 2013 is uncertainty surrounding the global economy, with the fragility of the eurozone remaining a major concern.”