Saudi: No Shortage of Crude Supply

abcnews.go.com Feb. 1 — By Peg Mackey

ABU DHABI (Reuters) - OPEC power Saudi Arabia said on Saturday there was no shortage of oil in world markets and it would work to ensure the producers' group fulfills its new higher production ceiling of 24.5 million barrels per day (bpd).

"We have responded to the demands of our customers...there is no shortage of crude supply," Saudi Arabia's oil minister, Ali al-Naimi, told reporters ahead of an energy and environment conference.

"I can assure we will make sure, as Saudi Arabia, that 24.5 million bpd is delivered," he said. OPEC agreed last month to raise its output ceiling by 1.5 million bpd to 24.5 million bpd in a bid to cover a supply shortfall created by strike-bound OPEC member Venezuela.

The oil minister of Saudi Arabia, the world's largest oil exporter, declined to say how much oil the kingdom was pumping.

But he said Riyadh would be prepared, if needed, to make use of its still substantial spare capacity which he pegged at 2-2.5 million bpd. "Saudi Arabia has stated many, many times its responsibility to the oil market," he said. "We will supply any shortage up to our capacity whatever the cause."

The kingdom's new OPEC quota from February is set at 7.963 million bpd, but industry sources say the kingdom is expected to pump 8.5-9.0 million bpd.

Naimi has made clear that Riyadh is capable if necessary of ramping up flows to 10 million bpd within weeks.

He said OPEC stood ready to make up for any supply shortages without the release of world's emergency reserves.

"There is confidence in the producing countries to make up any shortfall without having to draw on strategic reserves," Naimi said.

The Saudi oil minister said global stockpiles are now running on the low side, particularly in the United States, due to the two-month strike in Venezuela. But he said inventories would start to fill up soon.

"With Venezuela returning and supplies steaming to the U.S., we will see a gradual build in inventory," Naimi said.

The state of global inventories will dominate discussions at the cartel's March 11 meeting, he said.

Naimi estimated there would be a demand decline in the second quarter of the year of about 2.5 million bpd.