Saudi Arabia has renewed its commitment to bring down oil prices through extra supply to international markets, according to news reports.
The Financial Times cites a “senior Gulf official” saying “we would like to see oil prices back to $100 a barrel,” which the FT dubs “a signal from Riyadh.”
Reuters and Platts also cite a “senior Gulf official” stating that the oil market is “well balanced” and $100 is the preferred price of most OPEC members.
The official was attending a conference in Dubai yesterday, where Ibrahim Al-Muhanna, an advisor to Ali Naimi, and Ziad Al Murshed, head of Business Analysis and Corporate Planning at Saudi Aramco, were in attendance.
The reports recapitulate statements made by Saudi oil minister Ali Naimi, who explicitly said in May that the Kingdom was targeting a $100 oil price, though the Kingdom reportedly acted cooly to a communique from G7 finance ministers calling for more supply.
Oil prices remain at a level which the International Energy Agency says is harmful to economic growth in net oil-importing nations.
Prices have fallen somewhat in the last two days, with a flash crash late Monday sending the Brent benchmark down $5 a barrel within five minutes to $113 before recovering.
At the time of writing Brent stands at $112 after paring back further on another set of disappointing macroeconomic data and continuing signals that the US may undermine the IEA by a unilateral release of its own strategic petroleum reserve – which accounts for about half the total under the IEA’s SPR scheme – onto oil markets.
Saudi Arabia had slightly trimmed production in August according to OPEC figures, though at least part of this was due to a reduced amount of oil for domestic use as the country’s large gas projects from sources such as the Karan field ramp up their output to respond to booming demand for power generation.
The Kingdom is currently pumping around 10 million barrels a day, and the increased activity is good news for the industry, which has seen an uptick in work from the Kingdom driven by its commitment to supplying markets and its need to provide feedstock for domestic power generation and industrial uses.
Saudi is at odds with fellow OPEC member Iran, which has issued statements calling for higher oil prices as the country’s oil production and exports decline under international sanctions.