Saudi Arabia’s Oil Minister Ali Naimi said Monday the world has “clearly passed” the latest recession, with demand for crude oil to continue rising this year.
“The world has clearly passed the global economic and financial crisis and deep recession it experienced in 2008/2009, and entered, as of last year, a stage of growth which is expected to continue this year, before accelerating gradually the following years,” Naimi told a conference here.
The oil market is expected to remain balanced and stable in 2011, Naimi said. “I expect price stability to continue at last year’s rates,” he said.
Naimi’s comments on the global economy were somewhat more optimistic than in other recent appearances. Naimi also said OPEC would boost output in 2011 if market conditions demand, a comment that some analysts saw as an effort to calm markets amid speculation of $100 oil.
The front-month Brent crude oil futures contract was trading at $97.62, up 2 cents in choppy trading Monday morning at 945 GMT. The front-month contract at the New York Mercantile Exchange was down 47 cents to $88.64 in after-hours trading.
Naimi said 2011 “might mark an important turning point” in terms of the influence of emerging economies on oil markets. Weaker output growth from non-OPEC countries “will give OPEC countries an opportunity to boost their supplies to the global market to meet the rising global demand,” Naimi told a competitiveness forum head by the Saudi Arabian General Investment Authority.
“OPEC’s policy, as is well known, is to meet any increase in oil demand to maintain the supply-demand balance,” Naimi said. “It is also expected that some OPEC countries will increase their production capacities, thus maintaining OPEC’s spare capacity at approximately 6 MMBD.”
Saudi Arabia, the world’s biggest exporter and the Organization of Petroleum Exporting Countries’ largest producer, is generally seen as a moderate eager to respect the interests of both producers and consumers.
“Saudi Aramco will all the time supply what the market requires,” said David Wech, head of research at JBC EnerWech said. Naimi’s comments were “basically a reminder that OPEC is prepared … to calm the market.”
Naimi’s comments were “a statement to the bullish elements in the market that they are willing to meet supply requirements,” Wech added.
Naimi has consistently said he supports oil prices in the $70-$80 range, clashing with some other OPEC ministers who want prices of $100 or more.
The International Energy Agency, or IEA, said last week that OPEC leader Saudi Arabia had quietly boosted output to cool an oil price rally.
“With prices nudging beyond $95 a barrel … there appears to be tacit recognition by some producers of a need to adjust actual production levels to try to take some steam out of the market,” the IEA report said.
“It appears Saudi Arabia has been making more crude available to the market in the past six months, judging by export data from independent tanker trackers,” the report said, adding that preliminary data suggested the kingdom’s January output would be higher still.
Naimi declined to say how much the kingdom was producing,but said that the “IEA can say what they want.”
A source close to the matter told Zawya Dow Jones Monday that the country’s output was around a daily rate of 8.35 million barrels. That’s about 100,000 barrels more than a Dow Jones Newswires estimate of output in December.