RIYADH: Gulf states insisted that oil prices will recover without intervention from the Opec cartel, arguing that current prices will boost global economic growth.
Crude oil prices have plummeted as global demand has eased and new supplies such as US shale oil have come on to the market. The cost of benchmark Brent crude has nearly halved from $115 a barrel in June to below $60 last week.
But although oil producers and explorers from Aberdeen to Alberta are struggling to operate at a profit, Opec has refused to cut supply in order to lift prices.
Ali al-Naimi, the Saudi oil minister, yesterday said he was “100 per cent not pleased” with current prices, but insisted: “I am confident the oil market will improve.”
He added: “Current prices do not encourage investment, but they stimulate global economic growth, leading ultimately to an increase in global demand and a slowdown in the growth of supplies.”
Saudi Arabia, Opec (and the world’s) largest oil exporter, has been the “swing supplier” in the past, cutting or increasing production in order to stabilise global oil prices at around $100 a barrel. The Gulf state blames the current price slump on speculators and a lack of co-operation from producers outside Opec, and Mr Naimi said the kingdom would not act this time.If they [non-Opec oil producers] want to cut production they are welcome,” he told reporters on the sidelines of the 10th Arab Energy Conference in the United Arab Emirates. “Certainly Saudi Arabia is not going to cut.”