Saudi Arabia, the world’s largest crude exporter, is content with current conditions in the oil market, the kingdom’s petroleum minister said three days before OPEC members meet to assess the group’s output policy.
“This is the best environment for the market,” Ali al-Naimi told reporters Tuesday in Vienna when asked about the balance of supply and demand. “Demand is great,” al-Naimi said.
The 12-member Organization of Petroleum Exporting Countries will review its production target Friday at the group’s headquarters in the Austrian capital. OPEC, which supplies about 40 percent of the world’s oil, kept its official output ceiling unchanged at 30 million barrels a day the last time it met, in December.
Global demand is forecast to rise 800,000 barrels a day to 89.7 million barrels a day this year, requiring 29.8 million barrels of supply from OPEC, the organization said May 10 in its monthly oil market report on. It warned that a stalling economic re-covery in the eurozone and a slowdown in Russia and parts of Asia might temper consumption.
The OPEC basket price for crude, representing members’ export grades, fell to less than $100 a barrel on April 15, for the first time since July. It has traded on either side of that level in recent weeks and was last at $99.56 Monday. North Sea Brent crude, used to price more than half of the world’s oil, dropped 6 percent this year to trade Tuesday at about $104.50 a barrel on the ICE Futures Europe exchange in London.
The United Arab Emirates sees current crude prices as “suitable and fair” and not damaging to consumers, Suhail Mohammed Al Mazrouei, the nation’s energy minister, told the U.A.E.’s official WAM news agency.
OPEC pumped 30.7 million barrels a day of crude in April, up 0.7 percent from 30.49 million in March, according to a report from the Paris-based International Energy Agency published May 14. Data compiled by Bloomberg show thatSaudi Arabia, the U.A.E. and other OPEC members produced 30.9 million barrels a day in April, the highest output since November.
“Given the present price level as well as the outlook for crude market fundamentals for the second half, we expect Friday’s OPEC meeting to be rather uneventful, with the producer group likely to keep its current output target whilst continuing to verbally support the $100 level,” David Wech, an analyst at JBC Energy GmbH in Vienna, said in an e-mailed note.
OPEC is likely to keep its collective production target unchanged this week, according to two delegates from different OPEC nations, who asked not to be identified because the decision isn’t final yet.
The group’s collective production target is “working beautifully,” and there is no need to publicize individual national limits on Friday, Abdalla El-Badri, OPEC’s secretary general, said on April 4.
Saudi Arabia’s stateowned oil giant said production reached record level last year as global demand surged and international sanctions trimmed output from rival Iran.
Gulf Arab states havestepped up crude production to compensate for Iranian exports, which have dropped as customers such as India and China face pressure from the West to trim their purchases from Iran.
Sanctions over Iran’s nuclear program have targeted Tehran’s critical oil exports.
The Saudi Arabian Oil Co., known as Aramco, said Tuesday that oil production rose to 3.479 billion barrels in 2012, compared with 3.310 billion barrels in 2011. A statement on the Aramco website said it was the highest production in the company’s history.
It said exports reached 2.521 billion barrels last year, up from 2.421 billion barrels in 2011.
The price of oil rose to $95 a barrel Tuesday, supported by gains on global stock markets.
Benchmark oil for July delivery rose 86 cents to close at $95.01 a barrel in New York. It was the first gain for oil in five trading sessions. Brent crude, a benchmark for many international oil varieties, was up $1.61 to $104.23 a barrel on the ICE Futures exchange in London.
Information for this article was contributed by The Associated Press.
Business, Pages 23 on 05/29/2013