Hopeful comments made by a Saudi official resulted in a hike in oil prices on Tuesday, ahead of an important meeting of the Organization of Petroleum Exporting Countries to be held on Friday.
Ali al-Naimi, the oil minister of Saudi Arabia arrived in Vienna on Monday and told reporters that the strategy adopted by the OPEC of maintaining production is bearing fruit: The demand for oil is on the rise and the supply for the same has slowed down. The upbeat comments made by Saudi oil minister Ali al-Naimi may confirm that OPEC’s leading producer Saudi Arabia plans to steady its output of oil at the semi-annual meet to be held later this week.
David Livingston, an associate in the energy and climate program at Washington based think tank Carnegie Endowment for International Peace, said on Tuesday that the more the Saudi oil minister al-Naimi speaks before the Friday meeting, the chances of unexpected changes at the meeting are all that less. David Livingston added that the Saudis are fully dedicated to policy continuity at the moment.
After Saudi oil minister al-Naimi’s comments on Monday, crude prices in the United States went up to US$ 61 per barrel. The international benchmark price Brent also went up slightly. Even though the increase in a small one, it is being welcomed by an industry that has been suffering from low prices. This has been as a result of weak demand for crude accompanied by too much supply. Between the months of June and December last year, the oversupply of crude resulted in prices to drop over 50 per cent, plummeting from more than US$ 100 per barrel to even lower than US$ 50 per barrel.