Oil Price Should Be $25-$30/Barrel
by Abdulla Fardan
Mon, Aug 16, 2004 15:40 GMT
MANAMA, Bahrain - Saudi Arabia's de facto ruler Crown Prince Abdullah bin Abdulaziz al-Saud said oil prices should be in a range between $25-$30 a barrel to avoid hurting global economic growth, Kuwait's al-Seyassah newspaper reported Monday.
In an interview with the newspaper, the Saudi leader said he is mostly concerned about the economies of developing countries which he said would be harmed by high oil prices.
"Frankly speaking, the kingdom doesn't want to hurt the world economy," Prince Abdullah said.
Prince Abdullah's preferred oil price range deviates from the Saudi Oil Minister's long-standing position that prefers keeping with the Organization of Petroleum Exporting Countries' price band of $22-$28/bbl.
Oil Minister Ali Naimi has repeatedly said he prefers to see the OPEC basket price around the mid-point of the OPEC's price-range at $25 a barrel.
OPEC reference basket price was at $41.33 a barrel Friday, or 57 cents up from $40.76/bbl Thursday, OPEC's official news agency Opecna said Monday.
OPEC's basket price has been above its preferred target band of $22-$28/bbl since Dec. 2. Previously, the group aimed to keep the basket price within a $22-$28/bbl range by raising output by 500,000 b/d if the basket price held above $28/bbl for 20 consecutive trading days, or lowering output by 500,000 b/d if the basket price went below $22/bbl for 10 consecutive trading days.
Saudi Arabia has the capacity to meet current market demand, while "we have no hand in the current rise of oil prices," Prince Abdullah said. He added that major oil companies are responsible for the price spike through stockpiling or speculation.
"We have to go along with this situation, which we have no hand in...the market is a market, but we didn't wish the prices would jump over 30 U.S. dollars," he said.
What Saudi Arabia can actually do is to meet market demand by increasing production according to its capacity, but if the prices don't drop, it would be out of its ability (to help), Prince Abdullah said.
In an attempt to cool off surging oil prices, Naimi said Wednesday that his country was prepared to increase production by 1.3 million barrels a day if necessary.
"The Kingdom is well prepared to meet all the requirements of the international oil companies if they need additional volumes, relying on its surplus production capacity of more than 1.3 million barrels daily, which could be used immediately if required," Naimi said. |
