⏳ Final hours! Save up to 60% OFF InvestingProCLAIM SALE

OPEC won't bear burden of propping up oil price: Saudi minister

Published 03/22/2015, 09:17 PM
© Reuters. An oil well is seen near Denver
LCO
-

By Rania El Gamal, Reem Shamseddine and Andrew Torchia

RIYADH (Reuters) - OPEC will not take sole responsibility for propping up the oil price, Saudi Arabia's oil minister said on Sunday, signaling the world's top petroleum exporter is determined to ride out a market slump that has roughly halved prices since last June.

Last November, Organization of the Petroleum Exporting Countries kingpin Saudi Arabia persuaded members to keep production unchanged to defend market share.

The move accelerated an already sharp oil price drop from peaks last year of more than $100 per barrel that was precipitated by an oversupply of crude and weakening demand.

Since the oil price collapse, top OPEC exporter Saudi Arabia has said it wants non-OPEC producers to cooperate with the group. But Saudi oil minister Ali al-Naimi said on Sunday that plan had so far not worked.

"Today the situation is hard. We tried, we held meetings and we did not succeed because countries (outside OPEC) were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility," Naimi told reporters on the sidelines of an energy conference in Riyadh.

"The production of OPEC is 30 percent of the market, 70 percent from non-OPEC...everybody is supposed to participate if we want to improve prices."

Earlier, OPEC governor Mohammed al-Madi said it would be hard for oil to reach $100-$120 per barrel.

Oil prices recovered since January to over $60 a barrel, but have fallen again in recent days following a bigger than expected crude stock build in the United States that fueled concerns of an oversupply in the world's largest oil consumer. Benchmark Brent crude settled at $55.32 a barrel on Friday.

Oil companies, including U.S. shale producers, have slashed spending and jobs since the price of oil fell, and may face another round of spending cuts to conserve cash and survive the downturn.

Naimi repeated on Sunday that politics played no role in the kingdom's oil policy.

Some producers such as Iran, a political regional rival of Saudi Arabia, have criticized Riyadh for its stance on maintaining steady production.

"There is no conspiracy and we tried to correct all the things that have been said but nobody listens," Naimi said.

"We are not against anybody, we are with whoever wants to maintain market stability and the balance between supply and demand, and (with regards to) price the market decides it."

He said the kingdom's oil production was around 10 million barrels per day (bpd), and it had the ability to increase that to meet demand if customers asked for more.

"Currently there is no plan because there is no demand," he said, when asked if Saudi Arabia planned to expand production capacity beyond 12.5 million bpd.

© Reuters. An oil well is seen near Denver

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.