02-06-04
Saudi Arabia's Oil Minister Ali Naimi said that he feared the oil market
could be flooded with additional crude, adding an increase in OPEC output won't
solve record high crude prices. He also said it was a misconception that foreign
workers leaving Saudi Arabia in the aftermath of the latest terror assault would
impact the kingdom's output.
"Saudi Arabia can raise its production to 2 mm bpd but there is a fear that
the market may get flooded with oil," Naimi said.
Naimi, answering questions after a speech at the United Nations Economic and
Social Commission for Western Asia, also said he believed there was no shortage
of oil. Prices would stabilize but it could take some time, he added. He said he
didn't know what price would impact the world economy, adding $ 25 a barrel for
the group's reference basket of crudes remained an "appropriate"
price.
Separately, Naimi said; "Saudi exports are now nearly 7 mm bpd of crude
oil, and Saudi Arabia also exports 700,000 bpd of gas liquids and 200,000 to
400,000 bpd of condensates."
He said there was a need to reverse the market's fear of a shortage.
Separately, he said; "We know that the increase in oil prices has an effect
on world economic growth but we don't know how much it is hurting the world
economy." Also, "we're trying to make a balance between supply and
demand and prices will get down but it will take some time."
He added; "We think that the reasonable and just price for a barrel of
crude oil is $ 25."
Naimi reiterated his view that crude prices had been driven up by the weaker
dollar.
Source: Dow Jones