In its compilation of wire service reports, Saudi Gazette reports that Saudi Arabia is content with the current level of oil production within OPEC and would not support a production cut. The current level, already the result of earlier cuts, is providing a price above what Saudi Arabia deems necessary for its own economy. Further, prices continue to rise. While countries like Iran and Venezuela would like to see prices in the $90/bbl range, the Kingdom believes that such prices would drive down demand.
VIENNA – As oil prices rose to six-month highs, Saudi Oil Minister Ali-Naimi suggested Wednesday that OPEC will opt to keep production steady at its upcoming meeting.
Even before he spoke, the recent jump in oil prices was working against OPEC members advocating for even costlier crude. But Al-Naimi’s comment reinforced expectations that OPEC oil ministers would decide to continue pumping oil at present levels.
“There is no need to cut production,” Al-Naimi told reporters, adding that the group should “stay the course.” He said that oil prices would likely reach around $75 a barrel by the end of the year on the back of growing demand in Asia.
Benchmark crude for July delivery was up 67 cents to $63.12 a barrel by midday in Europe Wednesday in electronic trading on the New York Mercantile Exchange. Earlier in the session, the contract reached a peak of $63.45, its highest level since mid-November.
The Kingdom has said it can live with oil at $50 a barrel, while supporting the general view of the Organization of the Petroleum Exporting Countries that prices of $75 to $80 are needed over the longer term. Price hawks Venezuela and Iran, the No. 2 OPEC producer, have been the most vociferous in support of those levels ahead of the meeting.