JEDDAH, 15 March 2005 — Saudi Arabia will seek to raise OPEC production ceiling by 500,000 barrels per day at this week’s meeting of the Organization of Petroleum Exporting Countries in Isfahan, Minister of Petroleum and Mineral Resources Ali Al-Naimi said yesterday.
In a statement carried by the Saudi Press Agency, Naimi also said that the Kingdom would pump more crude later this year. “World demand is forecast to grow in the last part of the year, which necessitates an increase in production,” he said. “Hence Saudi Arabia will raise its production from the current level later this year,” Naimi said.
Riyadh believes “there is a need to raise OPEC’s output ceiling (of 27 million bpd) by half a million bpd” at Isfahan meeting tomorrow, he said.
Naimi did not say how much more the Kingdom, currently producing about nine million bpd, will pump, but noted that it has “a production capacity of 11 million bpd, which will constantly be available to fulfill the market’s needs.”
World oil prices slipped on the back of his comments: New York’s main contract, light sweet crude for delivery in April, dropped 31 cents to $54.12 a barrel in electronic deals. In London, the price of Brent North Sea crude oil for delivery in April lost 20 cents to $52.90 a barrel.
Naimi said current prices were not justified, “given the levels of demand and supply” and the fact that “current stockpiles are compatible with market requirements.”
Saudi Arabia, the world’s top crude exporter, “will monitor the oil market to determine if more supplies are needed,” he said. Naimi reiterated previous remarks that the Kingdom was working on raising its production capacity to 12.5 million bpd by 2009, in keeping with its “commitment to respond to market demand.”
Abdallah Al-Saif, Aramco’s senior vice president for exploration and production, said the additional oil — mainly Arab Light — would come from four projects which will be completed by 2009. Projects to further expand capacity are being evaluated, he added.
OPEC’s Economic Commission Board (ECB), which has just crunched supply-demand figures at OPEC headquarters, pegged global demand growth at 1.9 million bpd, nearly 200,000 bpd above the secretariat’s assessment last month.
