Oil at $100 a barrel is a “reasonable” price that won’t choke global economic growth, Saudi Arabia’s Oil Minister Ali Al-Naimi said.
“Prices will stay at these current levels in the foreseeable future,” he said today in a speech in Hong Kong, according to the text reported by the official Saudi Press Agency. “Current price levels will not affect economic growth in Asia,” he said.
Saudi Arabia, the world’s largest crude exporter, increased oil production and sales in January, according to figures from the Joint Organizations Data Initiative yesterday. The kingdom produced 9.25 million barrels a day in February, estimates from the International Energy Agency show.
Oil prices have fluctuated over the past 15 years more than any time in history and the definition of reasonable prices have changed over this period, Naimi said.
“My first speech in Asia as minister was in Singapore in 1996. Oil was just over $20 a barrel and I told the audience that the price, at the time, seemed reasonable,” he said. Four years later, the price was about $27, and was still seen as reasonable, according to Naimi. “Today, it’s up around $100 and it seems reasonable,” said the minister.
U.S. crude for April delivery declined 26 cents, or 0.3 percent, to $93.19 a barrel at 11 a.m. on the New York Mercantile Exchange after falling to $91.76. European Brent for May settlement dropped 57 cents to $109.25 a barrel on the London-based ICE Futures Europe exchange.
Saudi Arabia is concerned about global economic growth, not about maintaining oil prices at any specific level, Naimi said. Any suggestion that the nation is trying to keep prices high to finance domestic spending is “not realistic,” he said.
The kingdom will remain a reliable seller of crude to Asia and to the world even as domestic use is on the rise, Naimi said. The country’s export capacity won’t be affected as demand in future will not keep growing at the same pace, while it will seek to meet demand with other sources such as renewable energy and natural gas, he said.
“Current levels of domestic oil consumption growth are temporary. Our position as long-term, reliable suppliers of oil to Asia, and the world, is not in doubt,” Naimi said.
The kingdom’s oil exports to Asia have grown by 50 percent since 1997, he said. Exports to China alone went from zero in 1999 to one million barrels a day currently.
JODI, supervised by the Riyadh-based International Energy Forum, uses statistics supplied by national governments to compile data on imports, exports and output for oil-producing and consuming nations.