Saudi minister says no need for more cuts

Saudi Arabia’s oil minister said Jan. 16 there is no need for further production cuts by OPEC and called the situation in the global crude market “very healthy.”

Ali Naimi’s comments came amid speculation that the 12-nation Organization of Petroleum Exporting Countries could call an emergency meeting to discuss further cuts in production to keep global oil prices from falling further.

“There is no need now (for further cuts) on the basis of what market conditions are,” the Dow Jones Newswires quoted Naimi as saying after arriving in New Delhi for an international conference organized by India’s oil ministry.

The news pushed oil prices down by 88 cents to US$52.11 a barrel in New York, the Dow Jones Newswire said.

His comments came hours after Nigeria’s Petroleum Minister Edmund Daukoru said OPEC members should wait until February before deciding on further cuts in their crude oil output.

OPEC members said late last year they would reduce their output by 1.2 million barrels a day and plan to cut production by another 500,000 barrels a day beginning sometime in February. The cuts are aimed at keeping oil prices from falling too much in the face of weak winter demand in the United States — the world’s biggest oil consumer — increased production by non-OPEC countries.

Daukoru said it was too early to judge the impact of the cuts that have already been announced.

When asked if OPEC’s output cuts, totaling 1.7 million barrels a day, would be sufficient to buoy prices, he said: “I don’t know. February is not yet here. When we implement (the February cuts) ... we will see how the market is going to react.”

Naimi insisted OPEC has succeeded in managing oil inventories well.

“The market is behaving the way it should, I think,” he said. “The market is growing healthier by the day ... supply, demand and inventories are in equilibrium.”

—The Associated Press