Ali Al-Naimi, minister of petroleum and mineral resources of Saudi Arabia. (Getty)
Current oil prices will have no impact on growth in Asia, the oil minister for top exporter Saudi Arabia said on Monday, even as the region’s biggest economies struggle with rising energy costs in their efforts to boost growth.
Japan, one of the world’s top crude importers, is battling a huge trade deficit and India is fighting to rein in ever-growing domestic subsidies as prices rise.
Last October, Naimi said an oil price of $100 per barrel was suitable for both consuming and producing nations. In recent months, he has said that oil markets were well supplied and that stability had returned in the wake of jitters caused by Iran’s stand-off with Western nations.
“Current levels will not deter further economic growth in Asia,” Ali al-Naimi told an Asian investment conference in Hong Kong, although he did not elaborate.
“The prospects for the energy industry are stronger now than anytime in recent history,” Naimi added. “While the fluctuation in prices may be good for a few traders, it’s not good for long-term economic stability and growth.”
Brent crude fell more than $1 to below $109 a barrel on Monday, as the dollar firmed after a bailout proposal for Cyprus threatened to trigger fresh turmoil in the Eurozone.
Naimi’s comments on Monday follow recent warnings from key industry bodies that weak economic growth could hobble global oil demand this year.
Worsening Chinese business sentiment, a European slowdown and the prospect of US budget cuts would limit demand for oil worldwide, while soaring US production gives consumers a cushion against supply outages, the International Energy Agency said last week.
The comments by the West’s energy adviser came as it trimmed its forecast for 2013 oil demand growth by 20,000 barrels per day (bpd) to 820,000 bpd.
Producer cartel OPEC has also warned oil demand growth could miss forecasts in 2013 but has kept its forecast unchanged for now, still expecting an expansion of 840,000 bpd in global oil consumption this year.