From left: Qatar’s Minister of Energy and Industry HE Dr Mohamed bin Saleh al-Sada, Saudi Oil Minister Ali al-Naimi, UAE Energy Minister Suhail bin Mohamed al-Mazroui and Kuwaiti Oil Minister Ali Saleh al-Omair attend the opening session of the 10th Arab Energy Conference in Abu Dhabi yesterday. Al-Naimi blamed the prices fall to half their levels of six months ago on speculators and what he called a lack of co-operation from non-Opec producers.

Oil minister says Saudi will not lower production; al-Naimi says “let most efficient producers produce;” UAE urges all producers not to hike output in 2015

 

Reuters

Abu Dhabi

Saudi Arabia said yesterday it would not cut output to prop up oil markets even if non-Opec nations did so, in one of the toughest signals yet that the world’s top petroleum exporter plans to ride out the market’s biggest slump in years.

Referring to countries outside of the Organisation of the Petroleum Exporting Countries (Opec), Saudi Oil Minister Ali al-Naimi told reporters: “If they want to cut production they are welcome: We are not going to cut, certainly Saudi Arabia is not going to cut.”

He added he was “100% not pleased” with prices but they would improve, although it was unclear when. He blamed the fall in prices to half their levels of six months ago on speculators and what he called a lack of cooperation from non-Opec producers.

His remarks at a conference in Abu Dhabi marked the second time in three days that the kingdom has signalled that it would not alter output levels, preferring to allow the market to stabilise on its own.

The determined tone of his comments was echoed by some other Gulf oil ministers at the conference in the UAE capital.

UAE Oil Minister Suhail Bin Mohamed al-Mazroui urged all of the world’s producers not to raise their oil output next year, saying this would quickly steady prices. He did not elaborate.

The world is forecast to need less Opec oil in 2015 because of a rising supply of US shale oil and other competing sources, with no significant increase in world demand growth.

Kuwaiti Oil Minister Ali al-Omair said Opec did not need to cut production and would not hold an emergency meeting ahead of its next scheduled talks in June.

“I don’t think we need to cut. We gave a chance to others (and) they were not willing to do so,” he said, referring to contacts with non-Opec producers before Opec’s meeting in November in Vienna.

There, Opec kept its target output of 30mn bpd unchanged, leaving the market to balance itself without the group’s intervention.

That stance was seen as a shift from a longstanding policy in which Opec powerhouse Saudi Arabia has acted as a swing supplier.

Asked about possible cooperation between members of Opec, which include the world’s lowest-cost producers, and non-member countries, al-Naimi replied: “The best thing for everybody is to let the most efficient producers produce”.

He also said that Opec’s decision would ultimately help the world economy. “Current prices do not encourage investment in any form of energy, but they stimulate global economic growth, leading ultimately to an increase in global demand and a slowdown in the growth of supplies,” he said.

Iraq’s Oil Minister, Adel Abdel Mahdi, said he saw no need for an Opec emergency meeting but “we have to wait and see” whether the group was right to keep output unchanged.

Al-Naimi denied politics played a role in the kingdom’s oil policy and said the price fall would not have “a noticeable and big” impact on Saudi Arabia or other Arab economies.

The market slide has triggered conspiracy theories, ranging from the Saudis seeking to curb the US oil boom, to Riyadh looking to outsmart Iran and Russia.

Before the Vienna meeting, there were hints that Russia could cut output or exports if Opec did the same. But the message from Moscow after the meeting was that the world’s second largest oil exporter would maintain its output.

 

Temporary correction
in market, says al-Sada

The oil market is experiencing a “temporary correction” and fundamentals should dictate a fair price for oil, Qatar’s Minister of Energy and Industry HE Dr Mohamed bin Saleh al-Sada said in a speech yesterday.

“We believe in the role of market fundamentals in dictating prices,” he told a meeting of ministers of the Organisation of Arab Petroleum Exporting Countries (OApec) in Abu Dhabi.

Al-Sada also said the main reason for oil’s plunge in recent months was slow growth of the global economy and an increase in sources of supply, particularly unconventional.

Current oil prices may result in a weakening of investments in oil and gas projects, he added.

 

Non-Opec producers called on to cut output after rout

Bloomberg

Abu Dhabi

Oil producers outside of Opec should cut their “irresponsible” output with excess supplies harming the market, the UAE energy minister said.

The oil market is oversupplied by 2mn bpd, Qatar’s Minister of Energy and Industry HE Dr Mohamed bin Saleh al-Sada  said in an interview on the sidelines of a conference in Abu Dhabi. The Organisation of Petroleum Exporting Countries has produced about 30mn bpd since January 2013 while global output climbed more than 2mn bpd to 93.6mn barrels, according to data compiled by Bloomberg.

“We call on all other producers to stop the increase because the increase is harming the market,” UAE Energy Minister Suhail al-Mazrouei said in a separate interview at the conference. “If the increase stops, and they follow Opec’s lead, Opec’s decision is to fix production, if production stabilises in 2015 things will stabilise much faster.”

Brent oil prices tumbled 45% this year. Opec decided last month to keep production unchanged at 30mn barrels, resisting calls from cash-strapped Venezuela that the group needs to stem the rout in prices.

“Irresponsible production from outside Opec is behind the fall in prices,” al-Mazrouei said in a speech at the conference. “The market will improve over time.”

Output in the US is the highest in three decades, and production is poised to approach a 42-year high next year as declining equipment costs and enhanced drilling techniques more than offset the drop in oil markets, according to Troy Eckard, whose Eckard Global LLC owns stakes in more than 260 North Dakota shale wells.

Oil extraction is soaring at shale formations in Texas and North Dakota as companies split rocks using high-pressure liquid, a process known as hydraulic fracturing, or fracking.

While US oil drillers idled the most rigs in almost two years this month as they face falling oil prices, Opec is resisting calls to cut its output and Exxon Mobil Corp plans to increase its oil production next year.

“It’s a normal process, that the efficient producers produce,” Saudi Arabia’s Oil Minister Ali al-Naimi said at the conference.

The estimate of a 2mn barrel oversupply is more than the 540,000-barrel surplus signalled from International Energy Agency figures as of September 30. Global production was 93.6mn bpd compared with demand of 93.06mn barrels, IEA figures show.