Saudi Arabia, the
world’s biggest oil exporter, is not happy with current crude prices
and is determined to see lower levels, Oil Minister Ali al-Naimi said.
The kingdom
is working toward its goal of seeing prices drop by highlighting there’s
no shortage of supply, al-Naimi said in a statement in Seoul on Friday.
Stockpiles held by consumer nations are rising and Saudi Arabia is
producing 10 million barrels a day, he said. That’s close to the fastest
rate in at least 31 years, official data shows.
“We are
seeing a prolonged period of high oil prices,” al-Naimi said. “We are
not happy about it.” Fundamentally, the oil market remains balanced and
there there is no lack of supply, he said.
Benchmark
Brent oil futures have risen 13 percent this year on concern tension
over Iran’s nuclear program will disrupt exports from the Middle East.
The contract for May settlement on the ICE Futures Europe exchange was
at $121.19 a barrel today.
Inventories in the US, the world’s largest
oil consumer, have climbed to 365.2 million barrels, the highest for
this time of year since 1990, an Energy Department report this week
showed.
“Inventories
in Saudi Arabia and around the world are full,” al-Naimi said,
reiterating remarks he made last month in Doha. “Our Rotterdam inventory
is full, our Sidi Kerir facility is full, our Okinawa facility is
full.”
Global oil
markets are better supplied for the first time since 2009, the
International Energy Agency, the energy adviser to the Organization for
Economic Cooperation and Development, said in its monthly report
on Thursday.
Saudi Arabia
has invested “a great deal” to sustain its production capability and
will use spare capacity to meet any additional required volumes, said
al-Naimi. The country has the ability to produce 12.5 million barrels a
day, he said.
“The story is one of plenty,” said the minister. “Supply is not the problem.”
US oil
prices may fall next week on speculation negotiations between Iran and
world powers over the Persian Gulf nation’s nuclear program will reduce
tension, a Bloomberg News survey of 33 analysts and traders showed.
Brent
futures traded above $128 a barrel last month as Iran threatened to shut
the Strait of Hormuz, a transit route for a fifth of the world’s crude,
in retaliation against international sanctions. The European Union
plans to ban the transportation, purchase, financing and insurance of
Iranian oil from July 1.
“Saudi Arabia does not control the price,” al-Naimi said. “It sells its crude oil according to international prices.”
Iran, the
second-largest producer in the Organization of Petroleum Exporting
Countries, pumped 3.39 million barrels a day in March, according to a
Bloomberg survey of producers and analysts. That’s the slowest rate
since June 2002.
Other OPEC
members, such as Libya, Iraq and Angola, are taking “positive strides
forward” in increasing output, according to al-Naimi. The group has 12
members.
Supplies are
coming on stream from Canada and the US, he said. Shipments are also
being contributed from Russia, South America, Kazakhstan and Azerbaijan.
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