Oil prices at around $100 a barrel are reasonable for both consumers and producers, OPEC heavyweight Saudi Arabia’s oil minister said on Monday, again highlighting the top crude exporter’s preferred oil price.
Saudi Arabia’s Gulf ally Kuwait echoed the comments on price, saying the current levels were fair, with the market a little bit oversupplied.
“I just came from Hong Kong and I told everybody, in 1996, I thought $20 a barrel was reasonable; in 2006 I thought $27 a barrel was reasonable and now it is around $100 a barrel. I told them again it is reasonable,” Ali Al Naimi told reporters asking him what the fair price for consumers and producers would be.
Current oil prices will not deter economic growth, he told an investment conference in Hong Kong last week, amid warnings from the International Energy Agency earlier this month on worsening Chinese business sentiment, a European slowdown and the prospect of U.S. budget cuts potentially limiting demand for oil world wide.
In the second quarter, Saudi Arabia is expected to increase its oil output to match higher Chinese demand, industry sources said in February.
Benchmark Brent has traded above $100 a barrel for most of the time since early 2011, driven by supply concerns. Unrest in Libya to a standoff over Iran’s nuclear programme have all helped keep prices high, worrying investors that elevated energy costs will hurt the fragile global recovery.
Brent swung between a high of $128.40 and a low of $88.49 and gained just 3.5 per cent in 2012 from a year earlier. Prices for the benchmark crude so far this year have swung between $119.17 and the $106.80 a barrel it hit on Monday before rebounding to above $108 a barrel.
Both Naimi and his Kuwaiti counterpart were speaking on the sidelines of an energy conference in Kuwait.
Hani Hussein, Kuwaiti oil minister, said OPEC member Kuwait’s average oil production in March was a little less than 2.9 million barrels per day, but the market was a little bit oversupplied. Kuwait produces on average around three million bpd.