RIYADH, Saudi Arabia, Nov. 14 (UPI) -- The Saudi oil minister said it is not production levels but traders and speculators that are pushing oil prices to near record numbers.
Ali al-Naimi, talking to reporters Tuesday before the third OPEC Summit, said oil production, especially from OPEC members, is not what's keeping oil at more than $90 per barrel.
"I believe OPEC in general and Saudi Arabia in particular have demonstrated their ability to respond very quickly to any disruption," al-Naimi said. "So I don't foresee the tightness that pessimists are talking about."
He said it's not the supply and demand equation as much as it is the fears of speculators -- "gurus" and "experts" in the industry -- who are playing off geopolitical tensions.
Saudi Arabia leads the world's oil producers at 8.8 million barrels per day last month, according to a new survey by the global energy information firm Platts.
Saudi Arabia has the capacity to produce between 10.5 and 11 million bpd, according to the U.S. Energy Information Administration, the data arm of the U.S. Energy Department. It is investing $18 billion to boost capacity to more than 12 million bpd within two years.
The Platts survey found OPEC produced an average of 31.11 million bpd in October, an increase of 350,000 bpd since September. Increases in Saudi and Iraqi production led the growth.
The 12 member states of the Organization of Petroleum Exporting Countries are meeting this week in Riyadh in the third such summit. They will discuss various aspects of the oil sector's challenges, such as meeting demand and addressing environmental issues.
This is not a regular OPEC meeting, however, where the cartel discusses increases or cuts to its total production numbers. All members aside from Iraq and Angola -- in dire economic condition and new to the group, respectively -- are allotted production quotas. This is an effort to control production of what is about 40 percent of the global oil output.
Al-Naimi has said OPEC will not formally discuss changing its quotas to address the price of oil. It will be a hot topic, however, at OPEC's official meeting in Abu Dhabi Dec. 5.
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Ben Lando, UPI Energy Editor
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(e-mail: [email protected])
