While commenting on the current developments at the petroleum market, Minister of Petroleum and Mineral Resources Eng. Ali Al-Naimi, said the current increase in the prices of the crude oil is unjustified in the light of the current supply and demand situation, because the current stockpile is compatible with the requirements of the market.
"The sustained strength in crude oil prices is not supported by current oil fundamentals as both inventories and forward demand cover are within historic range. He added that " Notwithstanding the uncertainty prevalent in assumptions about future supply and demand levels, projections show an increase in demand in the latter part of the year which would require additional crude oil to satisfy. Accordingly, to adequately fulfill this year's additional demand, Saudi Arabian output shall be increased from current levels at a later time this year.
Furthermore, Saudi Arabia is of the opinion that OPEC production ceiling should be adjusted upwards by half-a-million barrels of oil day (BPD) during the forthcoming ministerial meeting.
Al-Naimi closed his statement by indicating that " The Kingdom of Saudi Arabia's current capacity of 11 MMBD can and will be made available to meet market requirements. Monitoring of markets will continue on a regular basis to determine if such requirements arise, and accordingly, additional crude oil supplies will be made available. With expansion plans underway for the period 2006-2009
to increase capacity to 12.5 MMBD, the Kingdom of Saudi Arabia remains fully committed to ensuring adequate crude supplies to the world as it has consistently demonstrated during periods of demand surges and supply disruptions."
