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Countdown to $100 oil (53) – Saudis happy with $100 oil
Jerome a Paris, European Tribune
In an interview with the Financial Times, the Saudi oil minister, Ali Naimi, admits to his powerlessness in today’s market:
We have nothing to do [with] where the price is today.
…We work very hard and consciously to be sure that whatever actions we take that we are responsible do not dampen economic growth
…We are today not producing all our capacity because it is not needed. The demand is not there, the customers are not there.
Via European Tribune and the Oil Drum
So, he’s claiming that oil prices today are not a threat to overall growth, that they are not caused by a lack of supply in the market, and that Saudi Arabia would be willing to step in with more production if needed (in this separate article, the FT notes that he mentions available capacity of 11.3mb/d vs 9mb/d current production).
In fact, he specifically blames speculators and rebuffs the IEA, pointing that scaremongering pushes prices up and helps some make money.
These pessimists about the adequacy of supply and adequacy of reserves in the future, I think they are doing a lot of damage to the stability on the market.
And logically, he specifically states that OPEC has no intention to discuss any production increases at their coming Summit, being satisfied with the overall market balance, and available stocks.
The question is – is this credible, or is he trying to find excuses for not being able to increase production? Saudi Arabia has always been worried, to a much larger extent than other OPEC members, by the risk of a slowdown of the global economy, and has had an explicit policy to bring in capacity in order to avoid price levels that would encourage the development of alternative fuels and energy savings. Indeed, the minister repeats these goals in the interview, but states that current prices are not a threat to the economy.
So – either he’s trying to hide his country’ inability to increase volumes, or he’s right, and he’s confident that such prices are indeed not sufficient to cut demand for oil. Either way, oil prices are not going down…
An article that summarises the interview: Saudi oil minister rejects Opec raise
(13 November 2007)
Also posted at Daily Kos and The Oil Drum: Europe.
Saudi Arabia seeks positive role in tackling climate change
Terry Macalister, The Guardian
Saudi Arabia insisted yesterday that it wanted to play a positive role in tackling global warming but this should be done with new technology, not “discriminatory” taxes against oil and petroleum.
Ali al-Naimi, the Saudi oil minister, said his country had signed up to the Kyoto protocol and was as interested as any other in tackling climate change but the world had to accept it would be dependent for decades on fossil fuels. Talk of peak oil and supply problems was the result of “confused” thinking by so-called oil experts and financial speculators who had driven crude to highs of nearly $100 a barrel unnecessarily, he said.
“We are a very strong participant to all conventions and protocols dealing with climate change and protection of the planet … We share with the world those concerns about what may happen but we are of the belief that technology will help with many of the problems,” he said.
Saudi Arabia and the wider Opec cartel had agreed that safeguarding the environment’s future was one of the three top priorities, alongside reliability of oil supply and global prosperity, he added. But the way forward was not higher taxes or financial help for alternative energy sources such as coal, he insisted. “We do not like policies that discriminate against petroleum or fossil fuels in general.”
(13 November 2007)
Oil prices too high, Saudi minister says
David Ebner, Globe & Mail
Blames pessimists, gurus and speculators; points to Alberta oil sands as benchmark for $60 target
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RIYADH — The world’s biggest oil producer thinks the price of crude should be closer to $60 (U.S.) a barrel than $100, pointing specifically to the cost of production in Alberta’s oil sands as a likely long-term benchmark for the commodity.
“The price today really has no relation whatsoever with the fundamentals. The fundamentals do not support the current price,” Ali al-Naimi, Saudi’s Arabia’s powerful Oil Minister, said yesterday.
Mr. al-Naimi’s expansive thoughts on the volatile oil market – for which he blamed “pessimists,” “gurus” and “experts” preaching Peak Oil that are “agitating the speculators” – were one of several factors that sent oil tumbling $3.45 or 3.6 per cent to $91.17 yesterday after nearly hitting $100 last week.
(14 November 2007)
(UPDATE Nov 14) Dave Cohen of ASPO-USA writes:
This is really too much. For al-Naimi to blame high oil prices on people worried about peak oil is just blaming the messenger for having the temerity to point out that world oil production has been flat for about 34 months now. Oil prices set in the markets have little to do with peak oil concerns at this point. He also manages to insult us, calling us “gurus”. Perhaps he should worry more about increasing Saudi production and show us the oil rather than talking trash.
Saudi says no OPEC production move in Riyadh
Simon Webb and Alex Lawler, Reuters
An OPEC summit this week will not act on production policy, Saudi Arabia’s oil minister said on Tuesday, reducing the prospect of an imminent output boost to lower record prices.
Ali al-Naimi, oil minister for the world’s top exporter and OPEC’s most influential voice, also said crude prices that have risen towards $100 a barrel did not reflect supply and demand fundamentals.
…the Organization of the Petroleum Exporting Countries has blamed factors outside its control – speculation, political tension and a weak dollar, for the rally [in oil prices].
(13 November 2007)
Fears about oil supplies groundless: Saudi
AFP
The oil minister of OPEC kingpin Saudi Arabia said on Tuesday that fears about a shortage of crude supplies were groundless and there was no reason for them to push prices to current record levels.
The fears are “groundless,” Ali al-Nuaimi told reporters in Riyadh ahead of an OPEC summit opening in the Saudi capital on Saturday.
“The prices today have really no relation with the fundamentals,” he said.
“I believe OPEC in general and Saudi Arabia in particular have demonstrated their ability to respond very quickly to any disruption,” Nuaimi added.
…Nuaimi said the kingdom, the world’s top oil producer, would within three months further expand its production capacity by around 500,000 bpd and raise it to 12.5 million bpd by 2009.
(13 November 2007)
An oil nation lifts its lid – just a little
David Ebner, Globe & Mail
DHAHRAN, SAUDI ARABIA — Flying on a chartered jet over the desert to the headquarters of the world’s most valuable company, Saudi Aramco, there is no tangible sense in the vast expanse of red-tinged sand below that the region is home to one-fifth of the planet’s proved oil reserves.
Few foreigners make the trip at all, beyond ex-pat geoscientists who come to complement a work force of roughly 50,000 that is mostly dominated by locals from Saudi Arabia.
Now, however, Saudi Arabia and its chief corporate venture, Saudi Arabian Oil Co. – known as Aramco – is suddenly opening its doors, yesterday hosting an unprecedented tour of parts of the company’s headquarters to a group of 20 mostly Western journalists.
…While Aramco’s door was still more closed than open yesterday, the kingdom’s message to North America and the rest of the world was clear: Saudi Arabia is your friend, modern, technically advanced and trustworthy, and Aramco is a reliable supplier of energy.
…Last month, Gholamhossein Nozari, Iran’s oil minister, said oil at more than $90 “is still cheap.”
That may be the view of Iran but $100 a barrel is beginning to weigh on the Western world, if not actually notably quelling economic activity. For Saudi Arabia, a lower long-term price is more likely to ensure ongoing robust demand for what is essentially the only product the kingdom sells, while the political goals of Iran versus the U.S. trumps long-term oil market strategy in Tehran.
(12 November 2007)
Saudi oil minister: Gulf producers do not control crude prices
Associated Press
KUWAIT CITY: Saudi Arabia’s oil minister said Sunday that Gulf producers could not control record crude prices but would continue their attempts to ensure adequate supplies.
Oil prices have surged near US$100 per barrel recently amid concerns about supplies, the weak U.S. dollar and OPEC’s apparent reluctance to pump more crude into the market.
(11 November 2007)
