By Moming Zhou and Wael Mahdi
(Bloomberg) — Saudi Arabia, which increased oil production to 10.3 million barrels a day in March, is ready to bring stability to prices, said oil minister Ali al-Naimi.
The kingdom, which led the Organization of Petroleum Exporting Countries last year in declining to cut output, will keep producing around 10 million in the near future, Naimi said Tuesday at a conference in Riyadh. The March figure is the highest in the Joint Organisations Data Initiative database since 2002.
The group will not cut output without cooperation from non- OPEC producers, Naimi said. Supply from Saudi Arabia, OPEC’s biggest producer, has added to a global glut that reduced oil prices by almost half since June. Russia is pumping oil at a rate close to the post-Soviet record and the U.S. will produce the most crude since 1972 this year.
“Market fluctuations are inevitable,” Naimi said. “The challenge is to restore the supply-demand balance and reach price stability. This requires the cooperation of non-OPEC major producers, just as it did in the 1998-99 crisis.”
Oil prices will improve in the near future, he said. Brent, the benchmark for half of global oil trade, ended at $59.10 a barrel Tuesday on the London-based ICE Futures Europe exchange, down from as high as $115.06 on June 19.
U.S. crude output will rise to 9.23 million barrels a day this year, the Energy Information Administration estimated Tuesday. Russia produced 10.71 million a day in March, including crude and condensate, according to data e-mailed from Energy Ministry’s CDU-TEK.
OPEC kept output targets steady at its meeting in November, focusing on maintaining market share rather than supporting prices. The group meets next in June.
“Some non-OPEC major producing countries said they were unable or unwilling to participate in production cuts,” Naimi said. “For this reason, OPEC decided at its Nov. 27 meeting to maintain production levels and not to give up its market share in favor of others.”
(c) 2015 Bloomberg.