Oil prices too high: Saudi oil minister

[Dav0]

Saudi Arabian Oil Minister Ali al-Naimi says current oil prices are "too high" but neither producing or consuming countries are to blame.

"These prices are too high," Naimi said, adding the recent run-up in prices had been caused by global geopolitics and hedge fund speculation.

US oil prices hit record levels of over $US75 a barrel last month, partially due to worries that Iran's standoff with western nations over its nuclear program could hit the OPEC member's exports.

OPEC members have said they are powerless to bring prices lower, with the producer-group already pumping near capacity and consumer crude inventories healthy.




Some industry experts are concerned the recent record high energy costs could hurt global economic growth and dampen crude demand. Naimi said that while demand for the Kingdom's heavy crude had eased recently, he did not think high oil prices would depress overall demand.

"I don't think demand destruction will be a concern," Naimi said, adding that there was no supply "constraint" driving up oil prices.

The Saudi oil minister said the world's top crude producer would remain a reliable oil supplier and planned to spend $US50 billion ($A66 billion) to boost output capacity by 1.5 million barrels per day (bpd) to 12.5 million bpd by 2009.

Naimi rejected theories from some energy experts that the world's oil production has peaked, saying he is "bullish" that technology will allow the kingdom to boost output to meet global oil demand.

"I believe such (peak oil) views are very shortsighted. They fail to recognize the extent which technology has enabled us to find and produce oil," Naimi told a conference at the Center for Strategic and International studies.

Saudi Aramco President and CEO Abdallah Jumah said there is still about two trillion barrels of recoverable oil still left in known fields around the globe, which can supply the world for many decades to come.

source - http://news.ninemsn.com.au/article.aspx?id=98186


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