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OPEC to boost production in case of oil shortage
by Anter Prakash Singh - February 23, 2011 - comments
Al-Naimi reiterated that OPEC is capable of meeting any shortage in supply as and when it occurs, but at present there is no shortage at all.
The Saudi Arabian oil minister Ali al-Naimi said that the Organization of the Petroleum Exporting Countries (OPEC) can increase its supplies to meet any shortage caused by the recent turmoil in oil producing countries of the Middle East.
He was speaking to the media in Riyadh after an OPEC meeting.
OPEC ready to meet any shortage
In an bid to pacify the unstable markets, Al-Naimi, said, “OPEC is ready to meet any shortage in supply when it happens. There is concern and fear, but there is no shortage.”
He was talking to the media after a consumer-producer meeting during which a charter for increasing cooperation was also signed.
Oil prices rose by 8 percent to reach $93.36 per barrel in New York opening trade amid reports of continuing unrest in Libya.
Al-Naimi reiterated that OPEC is capable of meeting any shortage in supply as and when it occurs, but at present there is no shortage at all.
Saudi Arabia is the largest producer country of OPEC and currently it produces nearly 8.4 million barrels per day.
The oil minister said that his country has the capacity to produce an additional 4 million barrels per day.
Situation different from 2008
Al-Niami said today the situation is totally different from 2008 when supply shortage made the crude oil prices reach $147 per barrel.
At present the demand and supply are equal, there are adequate supplies, and has spare capacity of 6 million barrels per day.
Commenting on the present unrest in the Middle East, he said that the instability in the markets is for a short term only.
“OPEC and particularly Saudi Arabia will compensate any shortage. Because we did that successfully in the past.... I want this transmitted to the market so the people can sleep well tonight.”
Prices continue to soar
Oil prices rose by 8 percent to reach $93.36 per barrel in New York opening trade amid reports of continuing unrest in Libya.
The U.S. Deputy Energy Secretary Daniel Poneman urged the oil producing countries to boost production in an effort to bring down the crude oil prices.
Poneman said that with increased supply in the markets, the price rise is likely to subside.
‘We think that the proper response (to the high prices) is that producers respond to those price signals and see the need for more production and bring that product to market,” said Poneman in Riyadh.
Meanwhile, two other leading members of OPEC, Kuwait and United Arab Emirates, also said that they are keeping a close watch on these developments and are prepared to respond to the situation if required.