GULF oil producers have assured consumers of sufficient crude supplies to help stem rises in oil prices fuelled by sweeping unrest in the Middle East and speculations.
"Certainly, Saudi Arabia's position in the world oil market is based on its commitment to maintaining spare capacity for the sake of price and market stability,'' Saudi Oil Minister Ali al-Naimi said.
Naimi told a roundtable meeting for Asian energy ministers that the kingdom had a spare capacity of more than 3.5 million barrels per day which Riyadh could use whenever the need arose.
On Sunday, Naimi said Saudi Arabia was ready to supply crude as demanded by customers, but he had acknowledged that the kingdom's oil output fell to 8.29 million barrels per day in March from as high as 9.1 million in February.
Energy ministers from 18 Asian nations, including major producers and consumers, concluded a one-day roundtable meeting by voicing concern that persistent high oil price could hamper global economic recovery.
``A concern was voiced by Asian ministers that elevated oil prices, if persisted, may hamper the global economic recovery,'' said the closing statement of the meeting.
The ministers were unanimous that ``geopolitical concerns are overstated since physical oil markets are well-supplied, with comfortable levels of spare capacity and stocks''.
Main Asian consumers China, Japan, India and South Korea, besides OPEC suppliers Saudi Arabia, United Arab Emirates and Qatar attended the meeting hosted by Kuwait. The next roundtable will be held in 2013 in South Korea.
The head of the International Energy Agency (IEA), Nobua Tanaka said after the meeting demand for oil was projected to rise in the summer and called on OPEC to fill the gap.
Addressing the meeting earlier, Kuwaiti Oil Minister Sheikh Ahmad Abdullah al-Sabah said the situation now is different from 2008, when oil prices shot to an all-time high of 147 dollars a barrel, because of abundant spare capacity.
``The situation in 2011 is quite different from 2008 due to the availability of surplus capacity in crude oil production and refining capacity as well as the high inventories,'' Sheikh Ahmad told the meeting.
But he said the ``volatility of prices poses a significant dilemma'', attributing the sharp rise in crude prices to a combination of factors.
``The increase in oil prices is due to the loss of large volumes of sweet crude from the market (Libyan oil), expansionary monetary policy, a weak dollar, fear of spread of political unrest to other producers, and the resilient demand in south-east Asia,'' the Kuwaiti minister said.
He also said that oil traders are driving prices higher and amplifying price signals, amid rife speculation.
Oil dipped in Asian trade yesterday as traders locked in profits after gains last week, but analysts said prices could still go higher.
Also yesterday, OPEC secretary general Abdullah El-Badri too said the oil cartel was ``concerned'' at the high crude prices amid fears of lower supply, although he added that markets were adequately stocked.
``We see that there is a 15-20 dollar premium risk at this time,'' Badri told reporters in Kuwait.
New York's main contract, light sweet crude for delivery in May dropped $US1.27 to $US108.39 a barrel.
In London, Brent North Sea crude for June shed $US1 to $US122.45.
Source: News.com.au
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