SINGAPORE: Current oil prices at above $80 a barrel are within a “very comfortable zone” beneficial to producers, consumers and companies alike, Saudi Oil Minister Ali Al-Naimi said Monday. “I would say we are in a very comfortable zone,” he said in answer to a question after giving a keynote speech at an energy forum in Singapore. “I believe this zone should continue for some time and I will not predict for how long. I hope it will be longer than most people think,” said the minister, whose country is the biggest producer in the OPEC oil group. The price of oil soared on Monday following strong manufacturing data from China and the United States, the world's biggest energy consumers. New York's main contract, light sweet crude for December, soared $1.52 to close at $82.95 per barrel. In London, Brent North Sea crude for delivery in December delivery jumped $1.47 to settle at $84.62 a barrel. Dollar-denominated crude becomes cheaper when the greenback weakens, stimulating demand and pushing prices higher. “Producers, consumers and companies are all happy with this price,” said Naimi, adding however that the crude market is “a little bit oversupplied”. In his speech, Naimi said the world will remain dependent on fossil fuels - crude oil, natural gas and coal - for the next 50 years despite what he described as a “premature enthusiasm” for the benefits of renewable energy. He added that Saudi Arabia, with proven oil reserves of 264 billion barrels, was capable of supplying crude for the next 80 years at current production levels “even if we never found another barrel”. “However, we're finding those new barrels. In fact, even though we produced 62 billion barrels of oil between 1990 and 2009, our reserves have not decreased,” the minister said.“Through new discoveries and improved recoveries, we are adding as much oil as we are producing every year. And we have been doing this for the past 20 years.” Too much focus on the benefits of renewable energy - such as wind and solar - was premature, Naimi argued, and created an uneven playing field for oil. “Premature enthusiasm for the benefits of renewables puts us at risk of equating smart energy with new energy,” he said. “In this view, the smart energy concept specificially marginalized fossil fuels as old energy. Indeed, some governments as a matter of policy are emphasizing green energy as a means of seeking energy independence and weaning away from fossil fuels.” He said “such a narrow focus unlevels the playing field, where policies, resources and public sentiment favouring alternative energies inhibit fossil fuels' ability to compete and contribute”. While renewables should be promoted to diversify the energy mix, there should be a sense of realism, he said. “Today, renewables' portion of the energy pie is just 2.0 percent and their share is expected to reach 4.0 percent by 2030,” he said. “From the smart energy fundamentals of adequacy and reliability, the world will depend on fossil fuels for the next 50 years. Of the dramatic 40 percent increase in world energy demand that we will be seeing over the next 20 years, 85 percent will be met primarily by fossil fuels.” – Agence France
