Holding firm: Ali Naimi
Naimi sees Opec 'staying the course'
Saudi Arabian Oil Minister Ali Naimi said Opec would "probably stay the course" when it meets this week as he forecast a pick up in demand and prices eventually rising toward $75 a barrel.
Naimi also said he was satisfied with compliance to quotas by Opec members, who meet in Vienna on 28 May. A senior Gulf source told Reuters the group would stick to its current targets, but stress the need for full compliance with them.
Current oil prices reflected expectations that demand will pick up, Naimi said on the sidelines of the G8 energy ministers meeting in Rome.
"Yes it is, that's why the price is where it is, people expect demand to pick up," the news agency quoted Naimi telling reporters when asked if prices reflect demand.
"Demand will pick up eventually when the economy recovers."
Asked whether he was satisfied with current compliance levels, Naimi said: "Yes, absolutely. Whenever it is at 80% or around 80%, that is the best you can expect."
Naimi also said inventories were high and that he would like them at 52 to 54 days of forward cover.
He said Saudi Arabia was pumping a little less than 8 million barrels per day and declined to give a date on when the Manifa oilfield would start production.
"By end of June we are going to have a capacity of 12.5 million bpd and we are idling a little bit less than 8 million bpd," he said.
"Do we need Manifa with a spare capacity of 4.5 million bpd?"
Meanwhile, Naimi also said that fighting climate change at the expense of fossil fuels would send the wrong message to the oil industry and risk dampening investment in the sector.
Fossil fuels will continue to dominate the energy mix for decades to come, while other sources like renewable energy will play only a supplemental role, he said in prepared remarks at the G8 energy summit.
"Any additional uncertainties regarding the future demand for fossil fuels, including the wrong notion that the world should abandon the use of such fuels, will only send a wrong message to the fossil fuel industry which will increase the risk to future investment," Naimi said.
Saudi Arabia is working to produce green fuels and shared global concern on climate change but efforts to fight it should consider the needs of developing countries as well, he added.
"Measures taken to combat climate change in the energy sector ... should not constitute a means of arbitary or unjustified discrimination or a disguised restriction on international trade," he said.