The global economy has strengthened enough to cope with oil at US$75 to US$80 a barrel and that level will be hit soon as fuel demand picks up, Saudi Oil Minister Ali al-Naimi said yesterday.
Oil has already climbed from a low of US$32.40 last December to six-month highs well above US$60 a barrel this week.
“The price rise is a function of optimism better things are coming in the future,” Naomi told reporters in Vienna.
PHOTO: BLOOMBERG
“We see offshoots of recovery,” he said. “There are a lot of positives in what I say because I am seeing a recovery.”
Naimi was speaking to reporters ahead of today’s meeting of OPEC, which he said did not need to change the group’s output policy.
“There is no need to cut production” and members should “stay the course,” he said.
He also said calling another extraordinary meeting before the group’s next regular meeting in September would “make no sense.”
US crude futures, the international benchmark, are above the US$50 a barrel a level OPEC had said it was willing to live with while the global economy recovered from deep recession, but still below the US$75 to US$80 Saudi Arabia and other producers have said was needed to drive investment in new energy supplies.
As a stronger economy boosts energy demand, Naimi said oil inventories would shrink, with the increase in consumption driven by emerging economies.
“Demand is picking up, especially in Asia,” he said.
He saw increased fuel use in Latin America and the Middle East, but an only limited upturn in consumption in the world’s leading energy consumer the US.
Oil inventories have reached the equivalent of around 62 days of forward cover, but Naimi saw them shrinking to 52-to-54 days, a level OPEC considers comfortable.
“Demand is picking up. It will bring down the days of forward cover and we will be happy thereafter,” he said.
Before last December’s crash, oil prices had risen to a record of nearly US$150 a barrel last July.
Producers, concerned about destruction of demand, as well as consumers said that level was too high.
Naimi has warned under-investment in bringing new energy supplies onstream could drive prices sharply higher once again and said the challenge would be to keep prices at a fair level for all.
“That is the biggest challenge,” he said when asked how to contain any price rise. “It’s very difficult. There are too many players in the market. It’s impossible with so many players.”
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
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