Saudi oil minister calls current global oil prices of around $75 a barrel ‘perfect’

Saudi oil minister: oil prices ‘perfect’

CAIRO — Saudi Arabia’s oil minister said current global oil prices are “perfect,” as several key OPEC members indicated the group was unlikely to change output levels when it meets later this month.

The Organization of the Petroleum Exporting Countries, which supplies roughly 35 percent of the world’s crude, has held its quotas unchanged since last year’s record 4.2 million barrels per day in cuts.

“The price is perfect,” Saudi oil minister Ali Naimi, whose country is OPEC’s most influential member, told reporters. “The market is stable right now, volatility is at a minimum.”

Since December, OPEC has focused on boosting compliance with output quotas of its 12 member states. The group’s approach has helped oil prices rebound to almost $80 per barrel recently, after they collapsed last year as the world’s worst recession in decades sapped demand for crude.

The benchmark crude oil contract for January delivery settled at $75.47 a barrel on Friday on the New York Mercantile Exchange, hitting a seven-week low on high global inventories and the strong dollar.

Ministers from several key Arab OPEC nations, however, indicated that they were satisfied with the current situation in the market and said it was unlikely the group would change quota levels at its Dec. 22 meeting in Luanda, Angola.

“No, no, no, I don’t expect anything,” said Shukri Ghanem, the head of Libya’s National Oil Corp. who serves as the North African nation’s de facto oil minister. “I think because … of the market situation, because of the fluctuation of the market, we don’t expect any change in the quota.”

Kuwaiti oil minister Sheik Ahmed Al Abdullah Al Sabah said the group would likely hold its output targets “as is.”

Algerian Oil Minister Chakib Khelil said that it would be some time before OPEC likely considered raising its production targets, signaling a lingering unease with global inventory levels.

All four officials spoke on the sidelines of the annual meeting of the Organization of Arab Petroleum Exporting Countries.

OPEC has said it wants to see crude in the $70-$80 per barrel range, a level which Saudi Arabia’s king had first indicated was high enough to encourage producers to continue their work while not shocking the world’s economy.

The producer bloc’s efforts to bring global crude stocks down have been somewhat undermined, however, by weaker compliance by some of its members — a slippage that has become more pronounced as oil prices climbed. The overwhelming majority of OPEC nations rely on oil revenues for as much as 90 percent of their foreign revenues, and higher prices have encouraged the more cash-strapped member-states to boost their output.

Libya’s Ghanem said that he believed the group will “have to call for more compliance by OPEC members because there is some … excess production.”

An OPEC report last month said the group, excluding Iraq which is not bound by quotas, produced roughly 26.5 million barrels per day in October. That is about 1.5 million barrels per day above their production target.

Naimi voiced satisfaction with the current situation, however, saying that “inventories are coming down.”