Prince Abdul Aziz: Saudi high oil output based on demand

Updated 27 April 2015

Prince Abdul Aziz: Saudi high oil output based on demand

ALKHOBAR: Saudi Arabia's high crude oil production policy is based on the status of global demand and the top oil exporter is keen to maintain its market share, the Kingdom's deputy minister of petroleum and mineral resources said on Monday.
Speaking to reporters in Saudi Arabia, Prince Abdul Aziz bin Salman described the oil market as "excellent", suggesting the OPEC heavyweight was comfortable with current global conditions.
"As the minister mentioned, the Kingdom responds to demand and supplies oil to wherever the demand is and whoever asks for it," he said.
"We care about our market share, we care about maintaining our customers and we care about the stability of the market."
Prince Abdul Aziz was referring to previous comments made by Minister of Petroleum and Mineral Resources Ali Al-Naimi who said last week that the Kingdom was producing near-record levels of crude in April at around 10 million barrels per day.
"I have said many times we will always be happy to supply our customers with what they want. Now they want 10 million," Al-Naimi told Reuters in the South Korean capital.
OPEC had said its overall output surged to 30.79 million bpd in March, up 810,000 bpd from the previous month, with demand higher than expected due to lower prices.
Yet there are some worries that growing output from Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) could snuff out a recent rebound in oil prices, at a time when oil markets have staged a fragile recovery.
Oil prices have almost halved since June last year in a drop that deepened after OPEC refused to cut production in November to maintain its market share against other competing sources of supply.
Prince Abdul Aziz declined to comment on a recent meeting in Riyadh with Venezuela's oil minister. The Latin American nation, dogged by a slowing economy and soaring inflation, is among OPEC members most deeply hurt by weaker oil prices.
OPEC meets on June 5. Iran and a Libyan OPEC official have urged the group to consider output cuts, while Kuwait — in a view expected to be shared by other Gulf OPEC members — has said the policy will remain unchanged.
Meanwhile, Prince Abdul Aziz said the carbon management is the cornerstone of the Kingdom's energy strategy.
‘’The Kingdom is fully aware that sustainable economic development will not be achieved without taking the issue of climate change into account,’’ Prince Abdul Aziz said while making the keynote address at the International Meet of Experts on Carbon Management, and the Forum and Exhibition of the International Methane Initiative for the oil and gas sector, hosted by Kingdom in Alkhobar on Monday.
Prince Abdul Aziz added that the Kingdom joined the initiative since January 2014, according to which the Kingdom has to share with others its experiences in the field of extraction and re-use of methane gas projects, besides its expertise in the area of the burning gases in the stovepipes and the control of emissions from pipelines and tanks. The Kingdom has also been focusing on methane in the carbon management recognizing that reduced methane emissions can lead to sharp fall in the rate of climate change.
The Kingdom is currently devoting its attention on making specific contributions in the national level, to be submitted before the United Nations Climate Change Conference 2015 in Paris, he said.
These contributions deal with the two main areas, firstly through economic diversification to increase the Kingdom's ability to cope with the social and economic consequences that could result from actions taken to reduce the use of hydrocarbons.
Secondly, adaptation measures that would achieve the benefits accompanying the reduction of the adverse effects by water conservation and urban planning, protection of the marine environment, and the reduction of emissions through coastal plants, reduction of desertification rate, which will lead to increase the role of forests and plants in carbon capture, the prince said in his speech.
As one of the largest oil and gas companies in the world, the Saudi Aramco supports the Kingdom's efforts in carbon management. It focuses a considerable share of its efforts to increase the utilization of hydrocarbon resources and protect the environment by reducing gas burning and taking measures to reduce other gas emissions practices.
"I believe that the balancing between reliable energy supply to meet the human needs that increase day after day, and the preservation of the precious natural environment is the greatest challenge facing the world at this stage of the the 21st century, " President of Saudi Aramco Khaled Al-Falih said in his speech at the opening session of the two-day meet.
Al-Falih emphasized that when it comes to the issue of methane emissions, the Saudi Aramco has a respectable record in this regard, and its action program includes reduction of burning it.


Barclays sees $2 per barrel impact to oil prices as coronavirus fears threaten demand

Updated 37 min 35 sec ago

Barclays sees $2 per barrel impact to oil prices as coronavirus fears threaten demand

  • More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China
  • Barclays expects the OPEC and other allies to step in and take further measures to keep the markets tight

BENGALURU: Barclays said on Tuesday oil prices will be impacted by $2 per barrel on the potential economic fallout from the coronavirus outbreak in China.
More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China, leading authorities to increase preventive measures, impose travel restrictions and also extend the Lunar New Year holidays to limit the spread of the virus.
The bank sees a $2 per barrel downside to their full-year Brent and WTI forecasts of $62 per barrel and $57 per barrel, respectively.
Compounding the effects of the spillover to economic growth from China and the region, Barclays expects transitory oil demand erosion of about 0.6-0.8 million barrels per day (mb/d) in the first quarter of this year, or 0.2 mb/d for the full year.
“If air passenger traffic in China declined by half in first quarter of 2020, it would likely lead to a 300,000 barrels per day year on year decline in jet-kerosene demand from China,” the bank said adding the fall in road transport would likely be less severe than in the past given reduced reliance on buses.
Barclays expects the Organization of the Petroleum Exporting Countries and other allies to step in and take further measures to keep the markets tight, in case the fall in demand is more acute.
Oil prices have been down for the last six sessions, but the bank said that the market reaction was likely overdone.
Barclays said the actual economic fallout from the coronavirus could be less severe than the 2003 SARS outbreak, given that the new virus seems less lethal than SARS so far and the measures taken by Chinese authorities.
The bank said the geopolitical risks to global supplies remain high as US-Iran tensions could continue to gradually escalate and oil production in Libya could fall further if the blockade of key infrastructure facilities continues.
Brent crude prices are currently trading around $59 per barrel and US WTI at around at $53 per barrel.