Saudi prince sees ‘excellent’ oil market as kingdom meets demand

WAEL MAHDI

KHOBAR, Saudi Arabia (Bloomberg) -- Saudi Arabia, the world’s biggest oil exporter, will meet any demand for its crude as the kingdom seeks to keep customers happy and maintain a balanced market, Prince Abdulaziz bin Salman, the deputy oil minister, said.

The oil market is in “excellent” condition, he told reporters Monday in the eastern city of Khobar, without elaborating. Benchmark Brent crude has gained 13% this year and was trading 46 cents lower at $64.82/bbl at 10:56 a.m. in London.

“We will supply any demand for Saudi oil, as we are interested in the stability of the market,” Prince Abdulaziz said. “Stability includes price, supply, and demand stability.”

Saudi Arabia raised output to 10.1 MMbopd in March, near an all-time peak, the International Energy Agency reported on April 15. Saudi Oil Minister Ali Al-Naimi has stressed that his country won’t cede market share to higher-cost producers and said in the capital Riyadh on April 7 that output was at 10.3 MMbopd and would remain close to that. The increase in Saudi production has contributed to a global supply glut fed partly by U.S. shale oil.

“Saudi Arabia responds to demand in the market,” the prince said. “We will provide oil to whoever asks for it.”

The shutdown of the Khafji offshore oil fields, which Saudi Arabia has developed jointly with Kuwait, removed 300,000 bpd from global supply, Prince Abdulaziz said earlier Monday at a conference in Khobar. The Saudis halted operations at Khafji on Oct. 16, citing unspecified environmental concerns. The halt has reduced Saudi emissions of methane gas, he said.

Saudi Arabia seeks to cut its crude consumption by 1.5 MMboed by 2030, the prince said. The nation plans to begin producing shale gas in 2016 at an initial output of 20 million to 50 million cubic feet per day, before raising it to 500 million in 2018 and 4 billion in 2025, Prince Abdulaziz said.

Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, will meet with the group’s other 11 members on June 5 to assess the market.