What is Saudi Arabia’s bottom line for propping up oil prices unilaterally before it leans on the rest of OPEC to help share the burden?
At $112 a barrel for Brent crude, well above OPEC’s preferred $100, it may not look like a hot issue just yet.
As Ali al-Naimi, oil minister for Saudi Arabia, OPEC’s biggest producer said this week, the oil market is in “the best situation it can be” and at “the right price.”
OPEC oil producers were set to hold output steady at their meeting on Tuesday, cautiously looking for a strengthening in the market and playing down the prospect of a surge from Iraq's oilfields.The cartel's most influential member, Saudi Oil Minister Ali al-Naimi, said it will hold output quotas unchanged, citing "excellent" crude price levels."No change," Naimi told reporters in Luanda, where the ministers of the Organisation of Petroleum Exporting Countries were to meet Tuesday, referring to the emergency quotas brought in a year ago to stabilise oil prices.
Oil traders should not lose too much sleep worrying about what OPEC, often unpredictable and quarrelsome in the past, will do when it meets next week.
The producer cartel, say delegates who attend meetings, is odds on to leave output policy unchanged. As a risk factor for oil markets, its May 31 gathering in Vienna barely features on traders’ radar.
Saudi Oil Minister Ali al-Nuaimi said he was satisfied with the current price of oil and saw no reason to change output quotas, as he arrived in Vienna Monday for an OPEC meeting later this week."Am I comfortable with the price? Yes," Nuaimi, the de-facto head of the Organisation of Petroleum Exporting Countries (OPEC), told journalists ahead of the cartel's meeting on Thursday."The price between 70 and 80 (dollars per barrel) is an ideal price," he added, noting that he was "happy" with the current situation.