Al-Naimi reiterated Saudi commitment to meet excess demand in the world oil market but refuted suggestions that the present surge in oil prices reflected a shortage of crude in the market.
“The Kingdom of Saudi Arabia has long been committed to promoting market stability in the interest of both producers and consumers, and in support of global economic growth and development,” Al-Naimi told the Saudi Press Agency.
He said the world oil markets have been sufficiently supplied. “Saudi Arabia has an excess capacity of 3.5 million barrels a day which could help compensate any shortages. The Kingdom has access to a large number of oil storage facilities around the world,” he said.
“Saudi Arabia’s systemic global role is obvious and instrumental in averting supply disruptions in the physical market and keeping the global economic recovery intact. Saudi Arabia’s ability to maintain around 70 percent of the world’s extra capacity is reassuring to global markets,” John Sfakianakis, chief economist at Banque Saudi Fransi, Riyadh, told Arab News.
“Speculators and punters as well as analysts who find it opportune now to call for oil price spikes are exaggerated and unjustified. Those who make such calls are often taking prior market positions damaging the global economy in many ways. Measures have to be taken now to contain such punters,” Sfakianakis added.
Brent crude futures for April delivery fell $1.94 at $113.10 a barrel by 12:37 p.m. EST (1737 GMT), having fallen as low as $112.13. US crude futures for April delivery fell 55 cents to $104.89 a barrel, after posting a low of $103.33.
Brent’s premium to the US benchmark West Texas Intermediate crude fell $1.44 to $8.34 a barrel, down from a peak of more than $17 last week. On Feb. 24 Brent hit $119.79, the highest since 2008, when it reached an all-time high of $147.50.
OPEC has yet to officially change its production policy, even though it has been boosting supply informally for months. OPEC members often adjust output informally in response to changes in demand and prices without the need for a meeting, Reuters said. Saudi Arabia sometimes steps in unilaterally to meet shortages or when it feels prices have risen to levels that may threaten economic growth or oil demand.
