In his first public comments since global oil prices dived
to four-year lows near $80 a barrel, Naimi said the world’s
biggest exporter wanted to work "with other producers to ensure
price stability for the interest of producers, consumers and the
industry at large"."Talk of a price war is a sign of misunderstanding,
deliberate or otherwise, and has no basis in reality," Naimi
told an event in the Mexican Pacific resort of Acapulco.
Oil markets have tumbled on growing speculation that Saudi
Arabia is more concerned with maintaining market share than
supporting prices, with some traders pointing to reductions in
the kingdom’s monthly oil price formula as evidence that it is
at war with fast-growing U.S. shale or other rival producers.
Naimi dismissed this notion, saying: "Saudi Aramco prices
oil according to sound marketing procedures, no more and no
less. These take into account a host of scientific and practical
factors, including the state of the market."
Naimi made no comments about possible action at a pivotal
meeting of the Organization of the Petroleum Exporting Countries
(OPEC) on Nov. 27. Some cartel members are pressing for action
to boost prices that have slumped more than 30 percent since
June, but core Gulf members have thus far said they see no need
for curbs.
Analysts said Naimi’s comments covered familiar and
oft-repeated themes, shedding little new light on his view of a
potential turning point in oil markets. The rise of the U.S.
shale boom and stunted demand in Europe and China is leading
some analysts to predict years of lower prices.
"This is classic Naimi speak, not expressly saying what
he’ll do at the OPEC meeting," John Kilduff, partner at New York
hedge fund Again Capital, said. "Parsing his words sounds to me
like the Saudis will not cut. Holding on to their market
position means more than anything else to Saudi Arabia now." Others were less certain. Global benchmark Brent crude oil
was little changed following Naimi’s comments, trading
50 cents lower at $81.17 a barrel. On Tuesday Brent hit $80.46,
its lowest since 2010.
"I could take those comments, point by point, and do equally
bullish and bearish interpretations," said Mike Wittner, head of
global oil and commodities research at Societe Generale.
"Those comments are very Greenspan-like in their
intentional lack of clarity," he said, referring to former U.S.
Federal Reserve Chairman Alan Greenspan.
Asked afterwards by Reuters if current global oil prices
were fair, Naimi did not respond.
NOT POLITICIZING OIL
Saudi Arabia has not commented publicly on the fall in oil
prices, prompting some industry watchers to wonder whether the
kingdom may be moving away from a policy of managing the market
toward an equilibrium of around $100 a barrel, which Naimi has
often called a "fair" price, and instead pursuing geopolitical
goals. "We do not seek to politicize oil … For us, it’s a
question of supply and demand, it’s purely business," he told
the conference. "We want stable oil markets and steady prices, because this
is good for producers, consumers and investors," Naimi added.
"It is therefore vital that OPEC and non-OPEC nations, producers
and consumers, continue their dialogue."
Despite rising world demand, OPEC expects demand for its oil
to fall in 2015 as higher supply outside the group, particularly
in the United States due to its shale energy production,
squeezes its market share.
OPEC members including Kuwait have said a cut in output at
the upcoming meeting is unlikely, but privately delegates are
starting to talk of the need for some action, although they warn
an agreement will not be easy to reach.
