JEDDAH/NEW YORK: Saudi Arabia's Minister of Petroleum and Mineral Resources Ali Al-Naimi denied Tuesday the surge in oil prices reflects a shortage of crude on the market, but said the Kingdom is committed to tapping excess supplies if needed. The 12-nation Organization of the Petroleum Exporting Countries has so far held its official output quotas unchanged, even as massive protests across the Middle East have pushed global oil prices to their highest levels since late 2008. An uprising in OPEC member Libya has stoked supply concerns, increasing pressure on the producer bloc to pump more to ease prices. Al-Naimi said the oil market remains well-supplied. In an interview with the Saudi state news agency, he reiterated the Kingdom's stance that the spike in oil costs stems more from financial speculation and unwarranted investor sentiment than industry fundamentals. “The Kingdom of Saudi Arabia has long been committed to promoting market stability in the interest of both producers and consumers, and in support of global economic growth and development,” Al-Naimi told SPA. At the same time, he signaled the Kingdom is prepared to act if needed, saying it has 3.5 million barrels a day of spare capacity that could be brought online. “Time after time we have delivered on that commitment by tapping our additional crude oil production capacity when supply conditions warranted, and Saudi Arabia will continue to reliably meet the world's petroleum needs,” he added. Earlier in the day, Naimi's counterpart in Kuwait told reporters that some OPEC member states, which together produce about 35 percent of the world's oil, had begun informal talks about how to address the price increase. Kuwaiti Oil Minister Sheik Ahmed Al-Abdullah Al-Sabah said OPEC members haven't decided whether the surge warrants an emergency meeting to adjust the group's output quotas. “We are in consultation, but we have not decided which direction,” he said, without providing details of the talks or where they might lead. Kuwait for now is sticking to its previously agreed quota levels. “We didn't increase,” Al-Sabah said. In Houston, top executives from some of the world's biggest energy companies Tuesday said global oil supply is plentiful in spite of Libyan supply disruptions, and urged US policymakers not to tap strategic oil stockpiles. At the high-profile CERAWeek energy conference sponsored by IHS CERA, chief executives from French oil major Total SA, US-based Hess Corp and Kuwait Petroleum Corp warned against a knee-jerk reaction to fighting in Libya, which has idled two-thirds of the African OPEC member country's oil output. Fellow OPEC producers like Saudi Arabia “have the capacity to fill the gap, so sending the message that we need to use the strategic reserves in my opinion will ... deliver the message that we are scared,” said Total Chief Executive Christophe de Margerie. “There is plenty of capacity in the world today ... to meet the shortfall from Libya,” said John Hess, CEO of Hess Corp, pointing to increased shipments from other Middle East suppliers. “That will stabilize prices from getting out of hand,” he added. Oil executives echoed assurances from OPEC officials that current supplies were sufficient to fill Libyan shortfalls. “There is an exchange of views between different members of OPEC,” Algeria's Oil and Energy Minister Youcef Yousfi told Reuters on the sidelines of the conference. “We do not think there is a physical deficit of oil in the market.”. “Any shortfall can be mitigated in the short run,” said Farouk Al-Zanki, chief executive of state-owned Kuwait Petroleum Corp. Oil prices fell Tuesday as OPEC considered raising production for the first time in more than two years, while the euro slipped for a second day on renewed euro zone debt worries. Brent crude prices dropped 1.7 percent to $113.08 per barrel, while US light crude futures were 0.4 percent lower at $105.02. OPEC is not scheduled to meet again formally until June 8 in Vienna.Oil inventories in developed nations remain high. But traders are concerned about the unrest.
