MANAMA-Global oil demand is expected to grow by an average of more than one million barrels a day annually and the oil industry needs around five million barrels a day of additional crude output capacity to keep up with demand, Saudi Arabia’s oil minister Ali al-Naimi said Thursday.
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HRH Premier made the statements as he received at his Palace in Riffa today the Saudi Minister of Petroleum and Mineral Resources Ali bin Ibrahim Al-Naimi, Egyptian Minister of Petroleum & Mineral Resources Tarek El-Molla, as well as a number of senior participants in the APICORP Energy Forum, now hosted by the Kingdom.
Threatened by surging output mainly from North America and Russian Federation, the Organization of Petroleum Exporting Countries has been pumping above its target for 17 months as it seeks to take market share from higher-cost producers.
European benchmark Brent oil for January delivery added four cents at $44.18 a barrel in London. The result has been market oversupply, and sharply falling prices.
Bart Melek, head of commodity strategy at TD Securities, said $40 a barrel has been a “tough support level” psychologically and in terms of technical trade.
Even so, Kleinman doesn’t foresee a big drop in shale output.
“Sustained, further oil price declines could raise further questions over the fat dividend yields offered by BP and Shell and indeed the FTSE 100 as a whole, because oil stocks represent 13% of the £73.7 billion in shareholder distributions expected from the index by the analyst consensus for 2016”, Mould said. Total USA oil production won’t recover to its recent peak until at least 2018, he said.
Saudi Arabia has previously said it won’t cut production alone without the cooperation of non-OPEC producers such as Russian Federation. That time, OPEC upheld its production quota of 30 million barrels per day. OPEC ministers plan to gather again on December 4 to assess the market and decide on production levels.
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With its huge discovered and undiscovered reserves the Arab world is a major player in global oil production and consumption. “The fact that the funding needed for energy projects in the Middle East is estimated at 700 billion dollars over the next 10 years shows how important it is to provide adequate funding for such projects”, he said.
