KSA denies Oil price drop is ‘Conspiracy’.
Reuters reports that last Sunday, Saudi oil Minister Ali Al-Nuaimi denied that there was a “conspiracy theory” behind OPEC’s decision in November to keep oil output unchanged.
“We are not against anybody, we are with whoever wants to maintain market stability and a balance between supply and demand, and (for the) price the market decides it.”
The minister also said that OPEC will not take sole responsibility for propping up the oil price, demonstrating that the world’s top petroleum exporter is determined to ride out the current market slump. Saudi Arabia managed last November to persuade OPEC members to keep production unchanged so as to defend market share. This is widely taken as the parameter that accelerated an already substantial oil price drop in the context of prevailing oversupply and weakening demand.
Saudi Arabia is, since that price collapse, saying that it wants non-OPEC producers to cooperate with all OPEC members and according to the Minister, this is not working.
“We tried, we held meetings and we did not succeed because countries (outside OPEC) were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility… The production of OPEC is 30 % of the market and 70 % from non-OPEC …Everybody is supposed to participate if we want to improve prices.”
OPEC Governor Mohd Al-Madi commented that it would be hard for the oil price to reach again its former price of $100 -$120 a barrel.
In the meantime, oil prices have and continue to fluctuate around the $60 mark amid oil companies, especially the US shale producers slashing their spending and reducing their workforce so as to remain solvent and eventually survive out of the downturn.
Al-Nuaimi confirmed that the KSA’s oil production being at around 10 million barrels/day, it had still the ability to increase it to meet demand if there is need for it.