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Saudi Arabia affirms oil strategy as market seen as 'excellent'
[KHOBAR] Saudi Arabia said it will keep pumping oil to meet any demand for its supplies as the world's biggest crude exporter seeks to defend its share of the market.
The oil market is in "excellent" condition, Prince Abdulaziz bin Salman, Saudi Arabia's deputy oil minister, told reporters on Monday in the eastern city of Khobar, without elaborating. The kingdom seeks to keep customers happy and maintain stability of prices, demand and supply, he said.
Saudi Arabia is affirming its strategy to refrain from reducing output amid a global glut after Oil Minister Ali Al- Naimi stressed earlier this month that his country won't yield market share to higher-cost producers. The biggest Opec producer pumped at close to a record pace in March, the International Energy Agency reported on April 15. That's adding to an abundance of supplies fed partly by a US shale boom.
"Saudi Arabia is interested in maintaining its share in the market and interested in keeping its customers," Prince Abdulaziz said. "We will supply any demand for Saudi oil, as we are interested in the stability of the market. Stability includes price, supply, and demand stability." Brent crude, a benchmark for more than half the world's oil, dropped as much as 1.4 per cent on Tuesday and was trading at US$64.67 a barrel on the London-based ICE Futures Europe exchange at 12.51 pm local time. Prices have rebounded 13 per cent this year after plunging almost 50 percent in 2014.
The desert kingdom is ready to supply China "with any additional quantities" of crude it may need, Mr Al-Naimi said Monday while visiting Beijing, according to state-run Saudi Press Agency. China, the world's largest oil importer, gets more than 16 per cent of its oil from Saudi Arabia, SPA reported, citing Nur Bekri, head of China's National Energy Administration.
"Saudi Arabia responds to demand in the market," Prince Abdulaziz said. "We will provide oil to whoever asks for it." The shutdown of the Khafji offshore oil fields, which Saudi Arabia has developed jointly with neighboring Kuwait, removed 300,000 barrels a day from global supply, the prince said. The Saudis halted operations at Khafji on Oct 16, citing unspecified environmental concerns.
Saudi Arabia seeks to cut its crude consumption by 1.5 million barrels of oil equivalent a day by 2030, the prince said. The nation plans to begin producing shale gas in 2016 at an initial output of 20 million to 50 million cubic feet per day, before raising it to 500 million in 2018 and 4 billion in 2025, he said.
Saudi Arabia will meet the other 11 members of the Organization of Petroleum Exporting Countries on June 5 to assess the market. The nation raised output to 10.1 million barrels a day in March, according to the IEA. It's pumping 10.3 million barrels and production will remain close to that level, al-Naimi said in Riyadh on April 7.