Saudi aiming to reduce oil price

DUBAI: Saudi Arabia is working to bring down oil prices, a senior Gulf source said yesterday, adding that the majority of Opec producers wanted oil prices around $100 per barrel.

The Gulf source said on the sidelines of an energy conference that the oil market was well balanced and there was no shortage of oil supply.

Saudi Arabia was pumping around 10 million barrels per day (bpd) of crude and Opec members and other producers would be increasing output over the next few months.

“We would like to see the price coming down and we are working to bring it down,” said the senior Gulf source, without giving further details. “The price now, we believe is high, and it’s not supported by fundamentals at all. It’s just speculation and geopolitics.”

Oil prices have risen by around 30 per cent over the last three months as investors have worried about security of supply from the Middle East and North Africa and on expectations that commodity prices would rise due to economic stimulus measures by the US, Europe and China.

North Sea Brent crude oil is now around $114 per barrel, from below $90 in June, and prices are now well above the cost of oil production from most oilfields and at a level that some economists say could damage the world economy.

The Gulf source said there was no shortage in oil supply.

“We think the oil market is well balanced,” he said.

“The majority of Opec countries prefer around $100, including Saudi Arabia,” he said, adding $100 per barrel was “right now the ideal price for the majority of Opec countries … the majority is all except one or two.”

gulf-daily-news, September 19, 2012