The Saudis Will Act to Lower High Oil Prices:No rational reason why oil prices remain high

Do you think we're paying to much for a barrel of oil? Ali Naimi the Saudi Arbian Minister of Petroleum and Minerals does

In  a column post yesterday on the Financial Times website Naimi states that there is no oil shortage and that the Saudis are upset about the high prices that are a danger to the gobal economic recovery. He said that Saudis will further increase oil output to off set high prices to ensure that the worldwide ecomonic recovery continues.

Naimi states:

...We want to correct the myth that there is, or could be, a shortage. It is an irrational fear, a fear without asis. Saudi Arabia’s current capacity is 12.5m barrels per day, way beyond current levels demanded, and a reliable buffer against any temporary loss of production. Saudi Arabia has invested a great deal to sustain its capacity, and it will use spare production capacity to supply the oil market with any additional required volumes.

This is not empty rhetoric. We have proved to be a reliable supplier many times in the past. We increased production following the invasion of Iraq. We increased production following a workers’ strike in Venezuela in 2002. We stepped in following a surge in demand from emerging economies, specifically China, in 2004. We increased supplies to the US in the wake of Hurricane Katrina. And when a popular uprising swept through Libya in early 2011, we stepped up production to offset any losses.

We have done it many times before, we will do it again.

The other, sometimes overlooked, fact is that Saudi Arabia’s crude oil is suitable, and acceptable, for most global refineries. We are also uniquely capable of supplying volume when and where it is needed thanks to multiple delivery points, our strong marketing capabilities and ample storage – inside the Kingdom and in other parts of the world, especially the Mediterranean, northern Europe and Asia.

For the record, as things stand today, our inventories in Saudi Arabia and around the world are full. Our Rotterdam inventory is full, our Sidi Kerir facility is full, our Okinawa facility is full – 100 per cent full...

It's time to put an end to the oil speculators that are driving up oil prices on fear rather than on reality.

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