JEDDAH: ARAB NEWS
Published — Tuesday 15 January 2013
Last update 15 January 2013 7:06 pm
Saudi Arabia cut oil output in December because of lower seasonal demand, a senior official at the Ministry of Petroleum and Mineral Resources said yesterday, rejecting reports that the move was to push up crude prices.
“Some media reports carried erroneous interpretations of the data of oil production in Saudi Arabia for December, which accused the Kingdom of deliberately pushing oil prices to higher levels. These reports are categorically wrong,” said oil ministry adviser Ibrahim Al-Muhanna.
Saudi Arabia cut its oil production in November and December by around 700,000 bpd, with output falling to around 9 million bpd in December. It topped that up with oil kept in storage to supply a total of 9.15 million bpd to the market in December. News of the cut has helped support Brent prices at over $111 a barrel, comfortably above the $100 Riyadh says it favors.
“Saudi Arabia’s production fluctuates month-to-month, and depends on a range of domestic, regional and international factors. At this point of time, production is driven by customer requirements, not by price levels. It is the market which sets the price of oil,” said Al-Muhanna.
He said Saudi Arabia was optimistic that economic uncertainty would pass and that economic growth would return in 2013.
“Saudi Arabia stands ready to respond to these changes, and again will meet all customers’ needs. It remains strongly committed to a stable oil market,” he said.