Saudi Arabia Says Market Doesn’t Need More Oil

(Bloomberg) — Saudi Arabia, facing calls from oil- consuming nations to pump more crude, has no plans to raise output because increased supply wouldn’t damp record prices, Argus reported, citing Oil Minister Ali al-Naimi.

Adding the country’s spare supplies would “destabilize” the market by flooding it with oil that isn’t needed, al-Naimi said, according to Argus. Pressure to raise output is “probably politically driven,” he said.


Crude oil prices have doubled in three years, touching a record $116.97 a barrel yesterday in New York. Saudi Arabia, the only member of the Organization of Petroleum Exporting Countries to have spare output capacity, can add more than 1.6 million barrels a day to production. The country pumped 9.2 million barrels a day in March, according to Bloomberg estimates. The other 12 members are close to capacity, Bloomberg data show.

The rising oil price is “absolutely” unrelated to supply and demand fundamentals and is caused by investors using it as a hedge against the falling value of currencies, al-Naimi said, according to Argus.

Bloomberg