ADELAIDE, Australia (Dow Jones)–Saudi Arabia would like the price of benchmark Brent crude oil to fall to US$100 a barrel, and expects global crude stocks to build ahead of an anticipated seasonal rebound in demand starting from July, Saudi Oil Minister Ali al-Naimi said here Sunday.
“We need to get prices at a level around $100. Now, it is still high,” Naimi told reporters, referring directly to Brent–the most widely traded oil contract worldwide.
Brent crude for June delivery settled Friday at US$112.26 on the ICE futures exchange. The contract has risen as high as US$128 a barrel this year on concerns that Iran’s oil supply could be choked by a looming import ban imposed by the European Union, as well as sporadic disruptions to crude shipments from Syria, Nigeria and Yemen.
Naimi’s comments come just days after the Organization of Petroleum Exporting Countries said it was pumping more oil than at any time since the summer of 2008, and it now had a rosier outlook for demand.
In a report released Thursday, OPEC estimated global oil demand growth this year to be around 900,000 barrels a day, up 40,000 barrels a day on its earlier forecasts. Global oil demand is now predicted to total 88.67 million barrels a day this year.
OPEC, whose members produce one in three barrels consumed worldwide, has raised output by a combined 2.2 million barrels a day within the past six months to soothe market fears that a July 1 ban by the E.U. of imports of Iranian crude could strain oil markets.
“It is very important to recognize that supply today is 1.3 million to 1.5 million barrels per day over demand, which is good. It is going into inventory and bringing inventory up–that should give comfort to consuming countries,” Naimi said.
Global crude inventories “should be a little bit higher” than their current level of 58 forward days, although this was still a comfortable amount to have in storage, he said.
Crude stocks are likely to build ahead of a seasonal pick up in oil demand in the third and fourth quarters of the current calendar year, he added.
In comments to reporters in Tokyo last week, Naimi said Saudi Arabia far the biggest oil producer in OPEC–is now pumping around 10 million barrels of crude a day and has 2.5 million barrels a day of spare capacity.
OPEC is next due to debate output on June 14 in Vienna.
-By David Winning, Dow Jones Newswires