Saudi source reiterates support to $22-28 oil price range

Saudi source denies Riyadh happy with $30 oil price

By Mona Megalli Bridge News Riyadh--Nov. 16

Saudi Arabia remains committed to an oil price range of U.S. $22-28 per barrel for the OPEC crude oil basket price, and is not complacent about oil prices of $30 per barrel or higher, a senior Saudi source told BridgeNews Thursday.

"We are not supporting $30 (per barrel). The Saudis are still within the target" of $22-28 per barrel for OPEC's daily crude oil basket, the source said.

The source said some traders had misinterpreted comments this week from Saudi Oil Minister Ali Naimi, who had said that current prices of around $30 had not yet hurt the world economy.

"The minister is just describing what we see in the market; he was just restating a fact," the source said, denying that these comments signaled Saudi Arabia's acceptance of prices above $30 per barrel.

Speaking in Vienna this week after the weekend OPEC meeting, Naimi had also sought to stress Saudi Arabia's ongoing commitment to a balanced market and to oil prices that would not hurt economic growth.

"If there is a shortage of supply, Saudi Arabia is prepared to make up the shortage. All of the questioning on ruling out (an increase) is nonsense," Naimi said.

"We would like to have a reasonable price, a stable price and a very well-supplied market. A price that will not negatively impact the economic growth of the world." Naimi reiterated these comments in a later interview with television channel CNBC.

"We have always said as Saudi Arabia that when we see a genuine shortage that (is) not being set by collective action by OPEC for any reason, of course we will do what we have to do to bring the market in balance," Naimi said. "The commitment of Saudi Arabia to (the) market is not in question".

OPEC member states earlier this year agreed to a $22-28 per barrel target range for the cartel's daily crude oil basket price. The basket price has been trading above the top end of this range for several weeks now, and on Wednesday climbed 51c to $32.36 per barrel.

http://www.petroleumworld.com/story1382.htm

-- Martin Thompson (mthom1927@aol.com), November 17, 2000