S. Arabia "Confident Oil Market Will Improve"

S. Arabia "Confident Oil Market Will Improve"
S. Arabia "Confident Oil Market Will Improve"

Saudi Arabia's oil minister on Sunday defended OPEC's decision to keep output steady despite the biggest market slump in years, saying current prices would help global economic growth and petroleum demand, while Arab states would escape major damage.

Ali Al-Naimi blamed a price slide to levels half of those six months earlier on speculators and what he called a lack of co-operation by major producers from outside of the Organization of the Petroleum Exporting Countries (OPEC), TradeArabia reported.

"I am confident the oil market will improve," Al-Naimi said, speaking to reporters on the sidelines of a meeting of ministers of the Organization of Arab Petroleum Exporting Countries (OAPEC) in Abu Dhabi.

At a meeting in November, OPEC kept its target output of 30 million barrels per day (bpd) unchanged, leaving the market to balance itself without the group's intervention.

That stance was seen as a shift from a longstanding policy in which OPEC powerhouse Saudi Arabia acts as a swing supplier. Al-Naimi said the decision would ultimately help the world economy.

"Current prices do not encourage investment in any form of energy, but they stimulate global economic growth, leading ultimately to an increase in global demand and a slowdown in the growth of supplies," he said. Naimi also denied politics played a role in the kingdom's oil policy and said the price decline would not have "a noticeable and big" impact on the economies of Saudi Arabia or other Arab countries.

"The (oil) policy of the kingdom is based on a strict economic basis, nothing more, nothing less," he said. "The kingdom of Saudi Arabia and other countries sought to bring back balance to the market, but the lack of cooperation from other producers outside OPEC and the spread of misleading information and speculation led to the continuation of the drop in prices," he said.

The UAE oil minister urged all of the world's producers not to raise their oil output next year, saying this would quickly stabilize prices.

"We invite everyone to do what OPEC did and take a step to balance the market through not offering additional products in 2015, and if everyone abides by the OPEC decision, the market will stabilize and it will stabilize quickly," Suhail Bin Mohammed Al-Mazroui said at OAPEC meeting.

Iranian Oil Minister Bijan Zangeneh said last week that the continuing price slide was a "political conspiracy." But Al-Mazroui said on Sunday: "There is no conspiracy, there is no targeting of anyone. This is a market and it goes up and down."

Iraq's oil minister said he saw no need for an emergency meeting of the OPEC, but "we have to wait and see" whether the group made the right decision to keep its output unchanged. Speaking to reporters on the sidelines of the conference, the minister, Adel Abdel Mahdi, added that he saw prices stabilizing at around current levels of about $60 a barrel. Iraq's total oil production would reach four million barrels per day (mbpd) after Baghdad reached an agreement on exports with Kurdish regional authorities, Mahdi said.