Oil prices dropped around a percentage point in early Asian trading after Saudi’s Opec governor said it would be hard to recover to previous oil price highs.
Saudi’s Opec governor Mohammed al-Madi believes that hitting the $100 to $120-a-barrel mark again would be “difficult”, the BBC reports. He also said Saudi Arabia would not ’unilaterally’ cut its output to defend prices.
Madi rejected suggestions that Saudi Arabia was letting the oil price fall for political and competitive reasons and said his country’s oil policy had no “political dimension”.
He added: “There isn’t any political dimension in what we do at the oil ministry – our vision is commercial and economic… We are not against anybody or against the [production of US shale gas]. On the contrary, we welcome it as it balances the market in the long run.”
He said the halving of oil prices since the middle of last year was because of fundamental supply and demand factors, not any non-economic policies.
Saudi Arabia’s oil minister Ali al-Naimi also said: ”We tried, we held meetings and we did not succeed because countries (outside OPEC) were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility.
“The production of OPEC is 30 per cent of the market, 70 per cent from non-OPEC…everybody is supposed to participate if we want to improve prices.”
According to analysts at Brooks Macdonald, today benchmark Brent crude oil futures were trading at $54.79. U.S. WTI crude was down 58 cents at $45.99 a barrel.