Riyadh: Minister of Petroleum and Mineral resources adviser, Ibrahim bin Abdulaziz Al-Muhanna said that Saudi production fluctuates month-to-month, and depends on a range of domestic regional and international factors, noting that at this point of time, production is primarily driven by customers’ requirements, not by price levels, and the market sets the price of oil.
In a statement to Saudi Press Agency (SPA) today, he said, ‘Recent media reports wrongly interpret Saudi Arabia’s production data for December, accusing the country of a deliberate attempt to push the oil price higher. These reports are categorically wrong.
One driver of Saudi Arabia’s production fluctuation is domestic demand, and this depends on seasonality. Peak demand was in the summer, but it has weakened over the last quarter, as usual. Another factor, equally important, is international customers’ demand for Saudi oil. This is also seasonal.
But if we look at the last quarter of 2012, for example, there were many challenges in terms of domestic growth in the Eurozone and concerns about the US fiscal cliff. This, consequently, impacted the demand for oil.
Going forward, we are optimistic that economic uncertainties will pass and growth will resume in 2013. Saudi Arabia stands ready to respond to these changes, and again will meet all customers’ needs. Saudi Arabia remains strongly committed to a stable oil market.’