Minister of Petroleum and Mineral Resources, Eng. Ali Al-Naimi has attributed the increase in oil prices in the international market to a number of reasons including the market's unwarranted fear of disruption in oil supplies from some oil producing countries and regions at a time when only the Kingdom of Saudi Arabia and probably two or three other countries have spare production capacity.
'Another cause is the trend among traders and investors to purchase and maintain long-term contracts for commodities such as oil', said Al-Naimi in a statement to SPA on Monday.
'Such a trend is a natural outcome of the robust growth of the international economy, coupled with the low interest rates on deposits and bonds.
In addition, the expected shortage in some types of gasoline in the US as a result of the stringent environmental regulations have aggravated the crisis and contributed to price increases both in products and crude', he elaborated.
He noted that the Kingdom of Saudi Arabia has been monitoring the market closely, and it is in constant and close contacts with its customers and oil importing countries.
'The Kingdom's policy is based on clear fundamental principles - advocating moderation in all issues, seeking stability of oil market through helping to achieve balance in supply and demand, and maintaining enough supplies to avoid prices fluctuation which might negatively affect producers, consumers and oil industry', Al-Naimi said and added: 'We also don't want to see prices rise to the level that they have an adverse impact on the growth of the international economy or demand for oil'.
Al-Naimi pointed out that the Kingdom believes that increasing OPEC production ceiling is essential in keeping the supply and demand balance.
'It is apparent that demand, especially that of Asia, has and will continue to increase in the second half of this year. We estimate that the required increase on the ceiling should not be less than one and half million barrels per day', he added.
Al-Naimi said during the next ministerial meeting of the International Energy Forum, due to be held within the next few days in Amsterdam, the market situation would be discussed.
'I will meet there the oil ministers of OPEC countries, and shall opt to reach an understanding to increase the production ceiling during the extraordinary meeting of OPEC to be held in Beirut at the beginning of next month', he concluded.
Source: SPA
