Saudi Arabia favours production rise
Saudi Arabia said Wednesday it favoured a "suitable increase" in OPEC oil production to guarantee a balance on the oil market and price stability.
"Instructions have been given to the Saudi oil minister, Ali al-Nuaimi, to have talks with the OPEC countries towards a suitable increase (in the cartel's output) to guarantee once again the balance on the market and stability of prices," according to a statement from the Supreme Petroleum Council, quoted by the official SPA news agency.
The council also said Riyadh wants to "review the mechanism aimed of achieving this objective while continuing to coordinate with the other producer countries outside OPEC."
"The Saudi kingdom adopts a policy aimed at guaranteeing the balance of the oil market, while taking into consideration the interests of oil exporting countries, the maintaining of world economic growth and the pursuing of crude oil deliveries at reasonable prices in line with the OPEC agreement in June," the statement added.
The council reaffirmed the "role of Saudi Arabia on the oil market and Riyadh's cooperation with members and non-members of OPEC to guarantee the stability of the market and the delivery of crude oil to consumer nations.
"The strategy of the kingdom is aimed a preserving its quota on the market and guaranteeing an acceptable level of its oil production capacity to maintain an ideal production level at all times," the council said.
The council, which is responsible for oil and mining strategy in the kingdom, was set up January 4. It is chaired by King Fahd. Other members are Crown Prince Abdullah bin Abdel Aziz and Defence Minister Prince Sultan bin Aziz.
The Organization of Petroleum Exporting Countries decided June 21 to boost its daily production by 700,000 barrels, for a total of 25.4 million barrels, starting July 1.
But the hike has failed to make a dent in the price of oil, which continues to cost more than 30 dollars a barrel.
The price of benchmark Brent North Sea crude for October delivery was trading Wednesday afternoon at 30.97, 39 cents lower than Tuesday's close.
Saudi Arabia is the world's leading oil producer, with the largest oil reserves in the world, estimated at 261 billion barrels.
In August 1999, King Fahd decided to create a "supreme economic council" to develop the kingdom's economic policy.
Wednesday's statement followed a newspaper report Monday quoting high-level OPEC sources as saying that the cartel will decide to hike output by at least 500,000 barrels per day (bpd) at the next ministerial meeting in Vienna on September 10.
"The cartel will increase its production by at least 500,000 bpd during its Vienna meeting on September 10," the London-based Arabic-language Al-Hayat newspaper said.
The sources said they were "astonished" that prices had remained above 30 dollars a barrel, adding "the market situation does not justify such a price level, which is due in part to speculation." - (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
- NCB capital sees long-term favourable outlook for GCC real estate market
- Saudi Arabia’s non-oil private sector companies recorded further growth of new business in July
- Oil price remains high as Saudi Arabia hints at production rise
- The great oil crash and the greater coincidence? Price drop has weakened Saudi’s rivals