Saudi to meet any oil shortfall despite output drop
2011-04-18 16:49:21
Saudi Arabia, the world's largest oil exporter, said on Sunday it is ready to supply oil as demanded by customers, but acknowledged that the kingdom's output had dropped last month.
"Saudi Arabia will supply whatever customers ask for," Oil Minister Ali al-Naimi told reporters on arrival in Kuwait to attend an Asian energy ministers' meeting.
"The market is over-supplied... (and) Asian demand is very strong," he said.
But he acknowledged that the kingdom's oil output fell to 8.29 million barrels per day in March from as high as 9.1 million bpd the previous month.
The minister declined to comment on what is a "fair" price for oil.
The head of the International Energy Agency (IEA), Nobua Tanaka, said on Sunday that current oil prices were "very high" and that the consumers' agency was alarmed that this could undermine economic growth and crude demand.
"Certainly current oil prices are very high... (we are) alarmed about that it could negatively impact the economic growth," Tanaka told reporters in Kuwait as he arrived for the meeting.
"High price is pressuring down the growth rate of oil demand," said Tanaka, citing the examples of the world's leading consumers the United States and China where demand for oil has dropped.
Tanaka called on oil producers to "carefully" watch demand for the commodity and accordingly produce so that the price does not hurt economic recovery.
"If the economy is really falling, the price will fall just like what happened in 2008," he said.
Producers should watch "the demand carefully and decide properly, otherwise the market is getting tighter," said Tanaka, adding that under such conditions "the price may go up and have a negative impact on economic growth."
"At this moment, we think OPEC should try to be as flexible as possible," he said in response to a question on what OPEC should do regarding production.
Crude prices rose on Friday amid choppy trade, as Chinese inflation figures and events in Nigeria and Libya cast a shadow over the market.
New York's main contract, light sweet crude for delivery in May, rose $1.55 to $109.66 a barrel.
London's Brent North Sea crude for June delivery gained $1.09 to $121.80.