Saudi oil market share strategy is working, Al-Naimi says

GRANT SMITH and WAEL MAHDI

VIENNA, Austria (Bloomberg) -- Saudi Arabia’s oil minister said the kingdom’s efforts to focus on market share are working just days before OPEC meets to discuss production.

“The answer is yes,” Ali al-Naimi said Monday upon arriving in Vienna for this week’s OPEC meeting, after being asked whether the Saudi strategy was working.

The Organization of Petroleum Exporting Countries will probably maintain its collective quota at 30 MMbopd, according to a Bloomberg survey. That’s after oil prices rebounded about 40% from a six-year low in January.

Saudi Arabia shaped OPEC’s strategy at the last meeting in November to defend the group’s market share, arguing that the usual response of cutting output to boost prices would not address the threat from U.S. shale and other higher-cost suppliers.

Al-Naimi said he didn’t know whether OPEC would agree to roll over production at the June 5 meeting. While “there is a surplus” in the global oil market, and it will “take time” for conditions to rebalance, things are moving “in the right direction,” he said.

“Demand in the second half of the year will be better than now,” al-Naimi said. “Demand is picking up, supply is slowing.”

The minister declined to answer a question on his preferred price range for oil.