Saudi Arabia is seeing an increasing demand for its crude oil globally as the kingdom continues efforts to restore balance between supply and demand to support a recovery of oil prices.
We are, in Saudi Arabia, watching the market closely, and if there is a need to take any action to help the market rebalance, then we would, of course in cooperation with Opec and major non-Opec exporters, Minister of Energy, Industry and Mineral Resources, Khalid bin Abdulaziz al-Falih, was quoted by state news agency SPA.
The ministerial meeting at International Energy Forum (IEF) in Algeria next month, will give Opec and major non-Opec ministers an opportunity to meet and discuss the market situation, including any possible action that may be required to stabilse the market, he added.
Asked, what the kingdom is doing to control oil price decline in the recent week, Al-Falih said that market rebalancing is already taking place but the process of clearing crude and products inventories will take time.
We are on the right track and prices should reflect that. But the large short positioning in the market has caused the oil price to undershoot, he said adding that this is unsustainable and the prices will go up from the current levels.
Saudi Arabias output hit 10.67 million barrel per day last month and Al-Falih said it has gone up in part to meet the increase in seasonal demand during summer and in part to meet higher demand from our customers.
Despite the bearish sentiment engulfing the market, we still see strong demand for our crude in most parts of the world, especially, as supply outside Opec has been declining fast, supply outages increasing, and global demand still showing signs of strength, he said.
Saudi Arabias supply figure of 10.75 million b/d in July was above that of production, and the minister said that there has been a modest stock drawdown last month which was expected during this time of the year. However, as the rebalancing process consolidates, the kingdom expects de-stocking to accelerate in all parts of the world, providing further support to oil prices.
The domestic demand in Saudi Arabia, which usually goes up during the summer due to increasing use of electricity for cooling, is lower this year than that of the previous summers.
The efficiency program that we adapted during the last three years has started bearing fruits, especially that now efficiency measures have been combined with higher electricity and oil products prices, which had the desired effect of slowing demand growth, he noted.