Riyadh says oil market at comfortable level

RIYADH — Oil giant Saudi Arabia said yesterday that global oil inventories were at “very comfortable” levels with supply exceeding demand, but was non-committal on what OPEC would do at its next meeting in December.

By (AFP)

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Published: Sun 27 Nov 2005, 10:04 AM

Last updated: Thu 2 Apr 2015, 5:28 PM

Oil Minister Ali al-Nuaimi also called on leading oil consuming states to stop blaming the OPEC cartel for their “suffering” from high crude prices, which he said were due to taxes those nations were imposing.

“Global inventories today are in a very comfortable position. As a matter of fact, supply today is higher than demand,” Nuaimi told reporters after a meeting of Gulf Arab oil ministers in the Saudi capital.

“Prices have started to stabilise,” added Nuaimi, whose country is the world’s top oil exporter.

But he would not say if he thought OPEC would at its meeting in Kuwait on December 12 renew its offer to pump an additional two million barrels per day (bpd) or consider an output cut for next year to prevent prices from dropping, as some pundits have predicted.

The option of OPEC pumping an additional two million bpd is now ”on the table. What happens at the meeting, I will tell you when we meet,” he said.

The oil cartel will “study the market then, and the decision will be taken accordingly,” Nuaimi said, adding he expected a growth in demand in 2006.

OPEC’s current official production ceiling is 28 million bpd, and it maintains the option of pumping the extra two million bpd if demand requires.

Prices are now in the range of 55-58 dollars a barrel after reaching a record high of more than 70 dollars in late August.

Nuaimi echoed a call by Saudi King Abdullah last week on leading consumer states to cut taxes on petroleum products.

“We hope that major consuming countries will discontinue blaming the burden on the consumer on OPEC.

What they should do is look at ... where is the source of the burden,” Nuaimi said.

“The source of the burden is both the tax and the VAT which are imposed on the individual. So it is not fair to say that the consumer is suffering because of the price of crude oil. He is suffering because of the high burden of taxes on him.”

Qatari Energy Minister Abdullah bin Hamad al-Attiyah said OPEC would consider “all options” when it convenes next month.

“I’m not saying there (will be) a cut or not. I said every time we met this ... has been the practice. We will discuss all the options,” he said.

“There should be no shortage of supply, (nor) should there be a big surplus on the market,” Attiyah said.

Iran’s OPEC envoy, Hossein Kazempour Ardebili, was quoted yesterday as saying the cartel did not need to alter its output quotas at the December meeting.

The meeting of Gulf Cooperation Council (GCC) oil ministers opened with an appeal to consumers to reciprocate the “wise and flexible” policies of Gulf Arab oil producers by refraining from applying protectionist and “discriminatory” measures.

The Gulf bloc is committed to “guaranteeing oil supplies and meeting growing demand for crude” and to coordinate with other producers and well as with consuming countries in order to help ”improve the performance of the world economy,” the GCC chief said in a statement read on his behalf. But the GCC policies “will not bear fruit in terms of achieving the desired stability on oil markets ... without the cooperation of the other parties and without refraining from pursuing protectionist policies and laws (which impose) taxes and discriminate against oil,” Abdulrahman al-Attiyah said. Bahrain’s State Minister Abdul Hussein bin Ali Mirza told reporters the topics discussed during Saturday’s meeting included unifying the GCC states’ stands on the Kyoto Protocol, the UN pact to curb global-warming gases, during a conference on the protocol’s future opening in Montreal on Monday.

The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

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