News Detail

• Saudi Arabian oil minister Ali al-Naimi mounted his most direct rhetorical attack against high oil prices on Wednesday, but showed no sign of moving to increase supplies even as France joined the United States and Britain in talks for a release of strategic reserves.Two weeks after Reuters initially reported that Britain and the United States were set to agree on tapping emergency stockpiles, French energy minister Eric Besson said the European nation was also in talks with Washington. Le Monde reported that the move could come in a matter of weeks.

• At the same time, the Financial Times published a rare opinion piece by the head of the world’s largest crude oil exporter, who said a feared shortage of oil supplies was a “myth” but reiterated that Saudi Arabia was ready, able and willing to meet any gap in supplies.The moves emphasised the growing concern from both sides of the market — producers and consumers — about the economic and political impact of the 15% jump in oil prices this year. But it also highlighted the different responses they are taking. Any release of strategic reserves is expected to be based on the assumption that oil markets face a shortage of crude, putting Western economies directly in opposition to the opinions offered this month by top exporter Saudi Arabia.

• Naimi’s comments were his bluntest yet on oil prices, which have been driven by the loss of supplies from several producers across the world and, more importantly, by the threat of a disruption from Iran. “The bottom line is that Saudi Arabia would like to see a lower price,” he said. “Supply is not the problem, and it has not been a problem in the recent past. There is no rational reason why oil prices are continuing to remain at these high levels.” But in the editorial, Naimi fell short of saying that the kingdom planned to increase production. Oil markets, already trading lower on the day after news of the French talks with the US, barely budged after his comments.

Source