Saudi oil minister says market oversupplied and cuts output

Reuters ^ | April 17, 2011 | Amena Bakr and Reem Shamseddine

[decimon]

KUWAIT (Reuters) – Saudi Arabia's oil minister said on Sunday the market was oversupplied and the kingdom had reduced output, sending a the strongest signal yet that OPEC may not boost output in June to quell soaring oil prices.

Consumers have urged the exporters' group to add supply to halt the rally in oil prices that has taken crude to its highest level in 2 1/2 years amid unrest in North Africa and the Middle East, but OPEC members say there is little they can do to bring prices down.

"The market is overbalanced ... Our production in February was 9.125 million barrels per day (bpd), in March it was 8.292 million bpd. In April we don't know yet, probably a little higher than March. The reason I gave you these numbers is to show you that the market is oversupplied," Naimi told reporters.

Two Saudi-based industry sources told Reuters last week the kingdom had cut production.

Naimi's words, echoed later on Sunday by his counterpart from the United Arab Emirates, are the clearest indications yet that the group is unconvinced there is a need for more oil despite the civil war that has slashed Libyan output and expectations Japanese oil demand will rise as it scrambles to rebuild its earthquake-shattered electricity grid.

"These statements underscore the breadth of the security premium currently in (oil) prices. Overall supplies are sufficient," said John Kilduff of energy hedge fund Again Capital. "As we've seen in the past, however, a well-supplied market is not always a barrier to very high prices."

[ButThreeLeftsDo]

Our friends, the Saudis.

[lexington minuteman 1775]

In other news...
Obama will be shooting hoops and preparing for more summer vacations...
Freegards
Lex

[Vince Ferrer]

Do they have the capacity even if they wanted to increase supply?

[docbnj]

If they are trying to stick it to 0, can you really blame them?

[Sacajaweau]

Playing with supply and demand again...not the Saudis...Wall Street...

[Diogenesis]

[NonValueAdded]

One look at gasoline prices and I could guess oversupply.

_{surely I don't have to add a sarc tag to that}

[Sacajaweau]

Absolutely...

[mojito]

Despite the bowing, the Saudis despise Obama and want him to be a one-term president.

If that means the US gets high gas prices for a couple of years, well, that's just the Saudis doing their part.

[trumandogz]

” Saudi Arabia’s oil minister said on Sunday the market was oversupplied and the kingdom had reduced output, sending a the strongest signal yet that OPEC may not boost output in June to quell soaring oil prices.”

OPEC as a cartel is a failure as its member states, except for Saudi Arabia, almost never comply with agreements to cut production.

However, in the long run a Saudi Arabian cut in production will help the US by raising oil prices and encouraging even more domestic drilling.

[Carling]

Obomba would support a rebel uprising against the Saudi royals, and want to gut him. Hell, I’ll pay $6/gallon for a year if it means getting rid of Obozo.

[Mariner]

"Our friends, the Saudis"

Did you read the part about supply not being the issue?

There's plenty of oil on the market. The issue is that so many "institutional investors" are bidding for the adequate supply.

That's a bubble and eventually these investors will be left holding the...er...will have to be bailed out too:)

[afraidfortherepublic]

“Come into my parlor,” said the Spider to the Fly...

[trumandogz]

Saudi Arabia is the only OPEC state that can increase supply, but that is limited as they typically produce at around 95 to 97.5% of capacity.

[listenhillary]

2008 oil speculation.

http://www.youtube.com/watch?v=HzfR_7O3JJ4

[gleeaikin]

There is plenty of supply, Cushing, OK is full to the gills. It is big speculators buying oil ETFs. Oil and food commodities need to be restricted to end users, like airlines, and food manufacturers. Only small traders should be allowed to buy small positions. Meanwhile, if Obama would threaten (not even do it) to draw from the Strategic Oil Reserve, it would probably scare some of the speculators out of the market and bring down prices.

[StolarStorm]

There is ample supply. Tank farms are filled to brim all over the world. There is so much crude in storage that they are having to use tanker ships to keep some of it. Massive building out of new tank farms is underway. No lack of supply, but speculators have bid up the price. If you want to blame anyone for the absurd prices, blame the hedge funds for it (and Obama for not curbing that problem).

Simple to fix, go back to only allowing producing and commercial consumers of crude to engage in energy futures deals.

[Truth29]

Payback for Mubarak?

[nhwingut]

It’s too early.

OPEC and speculators (Soros) will come to Zero’s rescue next summer (not this summer) during the heat of the election.