GENEVA: Oil Minister Ali Ibrahim Al-Naimi said Monday that the Kingdom had “significant” spare capacity to help stabilize oil markets despite the prospect of continued volatility. “There is adequate spare capacity in the system, inventories in all key markets are ample and there is significant spare capacity in Saudi Arabia,” Naimi told a UN forum on commodities in Geneva. “The Kingdom realizes it has an important role to play in promoting stability in world oil markets,” he added, underlining its past impact in working for a “well supplied and balanced” market. “It is our ongoing policy to maintain at least 1 to 1.5 million barrels per day spare capacity to use wherever and whenever it be needed. Today it stands at about four million bpd,” the oil and mineral resources minister said. Naimi and a senior International Energy Agency official insisted there was little reason that growing demand from Asia, emerging nations and recovering Western economies should outstrip supply and spark a return to record prices seen in 2008. “While there is reason to be vigilant about price, the current situation is significantly different from 2008,” Naimi said. However, he claimed that recent shifts in oil prices had less to do with the physical state of the market than “gyrations with the value of the dollar” and the newly-established influence of speculative trading on oil by derivatives traders. – Agence France
