Saudi Arabia to Adhere to Quota of 9 Million Barrels per Day

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Researched by Industrial Info Resources (Sugar Land, Texas)--Saudi Arabian Oil Minister Ali Al Naimi said at the 146th Ministerial Conference of the Organization of Oil Exporting Countries (OPEC) in Abu Dhabi in early December that Saudi Arabia will not increase its crude oil production but instead adhere to its rate of approximately 9 million barrels per day. This number represents an increase of 200,000 barrels per day compared with October after OPEC's decision to raise oil production by 500,000 barrels per day took effect on November 1, 2007.

Naimi said that the world market is well supplied and that Saudi Arabia will need to consider all market intelligence regarding supply, demand and reserve to make further decisions. So far, Saudi Arabia considers the world supply to be sufficient and the world reserve to be at a comfortable level. Naimi also said OPEC has nothing to do with oil prices. In late November, Naimi said at an energy conference in Singapore that that oil prices are determined by the market. The rise and fall of crude is subject to market supply and demand. He attributed high oil prices to the weakening U.S. dollar, speculation and geopolitics.

After hitting a record high in late November, the international crude oil price started to experience a downturn in early December. Increases in output could further lower the crude price and harm the revenue of oil-producing countries, Saudi Arabia said at the OPEC conference.

Though no agreement on an increase came out of the OPEC meeting, speculations still hold that the 13 members could increase their output in February 2008 at another OPEC meeting to be held because of growing pressure from oil-consuming countries.

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