Oil is unlikely to rebound to $100 any time soon because higher prices would spur more output and prolong a glut, said Mohammed al-Madi, Saudi Arabia’s OPEC governor.
Oil prices at that level “will let the high-cost producers come back again,” al-Madi said at a conference in Riyadh on Sunday. Saudi Arabia, the world’s biggest oil exporter, is pumping at a near-record level of about 10 million barrels a day, Oil Minister Ali al-Naimi said at the conference.
Brent, a global oil benchmark, fell almost 50 percent in the past year as Saudi Arabia and others in the Organization of Petroleum Exporting Countries chose to protect their market share over cutting output to boost prices. While U.S. producers have idled rigs for 15 consecutive weeks, output is still running at its highest level since at least 1983.
“Shale-oil companies are one of the high-cost producers that benefited from high oil prices,” al-Madi said. “We’re not against shale oil. We welcomed shale oil, but it’s not fair for high-cost producers to push low-cost producers out of the market.”
Saudi Arabia can meet demand from any customer, and while global consumption is improving, there isn’t enough need to raise the nation’s production capacity beyond its current level of 12.5 million barrels a day, al-Naimi said.Read the rest of the article by clicking here.
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