Oil prices fell slightly in the third week of March, in spite of an across-the-board draw on the main US inventories and continued political tension surrounding Iran and Nigeria. Spot Brent was trading at $60.68 a barrel on 23 March, compared with $62.91 a barrel a week earlier.

US crude stocks dropped by 0.4 per cent to 338.6 million barrels in the week to 17 March, according to data released by the Energy Department on 22 March, partly due to increasing refinery runs. Gasoline supplies fell by 1 per cent to 221.6 million barrels while distillate inventories registered a draw of 0.6 per cent to 126.7 million barrels. US retail gasoline prices in mid-March rose to their highest level since late October, the government announced on 20 March, and recorded their biggest weekly increase since late September.

Riyadh provided both solace and concern to the market on 22 March. Inaugurating the 300,000-barrel-a-day (b/d) Haradh field development, Petroleum & Mineral Resources Minister Ali Naimi reiterated the kingdom’s commitment to market stability. ‘Part of this is to maintain not less than 1.5 million b/d of surplus production capacity to meet growing demand or to cover unexpected shortfalls in supply,’ he said. The full commissioning of the Haradh field takes capacity up to about 11.3 million b/d.

However, Naimi also expressed his comfort with current high oil prices: ‘Today, we see prices at a level where everyone benefits and the consumer is not harmed.’ The minister also said that he was unconcerned about rising global stock levels. ‘In these somewhat tense and uncertain times, it is only logical for consuming countries to build stocks. In normal situations, very high stocks would have a depressing effect on prices, but these are not normal times.’