“We have been sailing very well and we will continue to sail very well,” Naimi told reporters a day ahead of a meeting of the group, many of whose members have voiced concern it is pumping too much oil.
In December 2008 OPEC agreed members would slash 4.2 million barrels per day (bpd) from output to curb supply at 24.84 million bpd as the chill of recession threatened to shrivel oil demand.
Rising prices in the last year and a hesitant global recovery have encouraged revenue-hungry OPEC members to add supply. In February, OPEC delivered just 53 percent of the pledged output curbs — down from 81 percent a year ago.
Nevertheless, oil prices have not strayed far from levels Saudi Arabia considers beneficial to producers and consumers, around $ 70-80 per barrel, as investors eye a future pick-up in demand to mop up current oversupplies.
On Tuesday, Algerian Energy and Mines Minister Chakib Khelil said prices will edge up into the $ 80-85 range by year end.
Benchmark US crude futures gained over $ 1 toward $ 81 per barrel on Tuesday, largely driven by stock markets rallying on optimism about recovery.
But prices remain volatile and often move on factors other than fundamental supply and demand.
On Monday, prices had fallen nearly 2 percent as the dollar gained and investors worried China might tighten credit further to put a brake on racing inflation — and consequently slow booming growth.
Oil market players remained cautious about short-term demand.
United Arab Emirates Oil Minister Mohammed Al-Hamli said the oil market may see a decline in global demand in the second quarter, adding current fundamentals do not call for a change in OPEC’s output policy.
Royal Dutch Shell Chief Executive Peter Voser said on Tuesday market fundamentals remained weak in the short term but medium term demand is robust.
Several ministers arriving in Vienna stressed the need to adhere to output targets as global demand heads into the traditionally weak second quarter.
Kuwait’s Oil Minister Sheikh Ahmad Al-Abdullah Al-Sabah said compliance was “the major issue,” and Qatar Oil Minister Abdullah Al-Attiyah said he thought the meeting would discuss compliance and that he saw the market was well supplied.
Saudi Arabia is one of the best adherents to output targets in OPEC, pumping 8.22 million bpd in February against an implied target of 8.05 million bpd.
But Naimi is taking a more relaxed view on OPEC overproduction, taking the longer view shared by major forecasters that bustling China will drive even stronger global economic recovery later this year.
“The reason why the global economy is going to grow faster is because China and India are pulling very hard,” OECD Secretary-General Angel Gurria said as he forecast global growth this year of 4 to 4.5 percent.
The International Monetary Fund expects China’s economy to expand 10 percent this year while advanced economies will deliver a faltering 2.1 percent.
Naimi said OPEC would not reduce supply if it meant prices could be driven too high. “The market is happy, there is balance, there are no shortages, there is enough investment going on,” he said.
Khelil said OPEC will probably not need to meet again before its scheduled September meeting.
“We’ll stay with this situation and we’ll see in September,” he told a news briefing.
