You are here
LONDON -- Saudi Arabia's oil minister Ali Naimi said Monday that the "fear factor" over supplies has added $10 to $15 per barrel to the price of oil and reiterated that his country is working toward lifting its sustainable oil production capacity, reported the Associated Press.
Naimi said during a speech in London that the recent surge in oil prices differs from the earlier oil crises in 1973-74 and 1979-80, which he said were largely politically driven.
"What we're seeing is totally different. It's a demand-driven situation. Everyone was taken by surprise," Naimi said. "All of this has put $10-$15 additional on the price of oil," he told the gathering of economists, analysts and journalists. Naimi declined to put an exact figure or range on what he believed was a fair price for oil.
Oil futures struck a record high of $55.17 per barrel in late October, amid concerns about future supply, the situation in Iraq, potential strikes in Nigeria and unrest in the Middle East. Light sweet crude for January delivery was up 1 cent at $49.45 per barrel in New York Mercantile Exchange electronic trading by midday in Europe.
Naimi said analysts predicted in 2003 that demand for this year would be 1.3 million barrels per day more than last year, but it has instead increased by 2.8 million to 3 million barrels a day. "We're trying to catch up," he said. "We've gone to 9.5 million barrels per day. Other OPEC members are at maximum."
Naimi said Saudi Arabia has already reached a capacity of 11 million barrels per day. The nation has said it holds some 260 billion barrels of proven crude oil reserves, accounting for a quarter of the world's total.
Naimi said the Qatif and Abu Safah projects had increased capacity by 800,000 barrels per day ahead of schedule. "We have also recently developed plans to increase gradually Saudi Arabia's sustainable capacity to 12.5 million barrels per day and this will be on new and old oil fields in the next few years," he said.
Ministers of OPEC are due to meet Dec. 10 in Cairo to reassess their supply commitments.
Iran and Venezuela have hinted in the run-up to the meeting that members could trim their record 30 million barrel per day supplies to prevent crude prices from spiraling lower after months of higher output.