Saudi Minister backs OPEC production increase

Saudi Arabian Oil Minister Ali Naimi has said that he backs an increase in OPEC’s production ceiling but questioned whether demand justified adding actual oil to the market.

Speaking at a news conference after meeting with Norwegian Oil and Energy Minister Thorhild Widvey, Naimi said Saudi Arabia is pumping 9.5 million barrels a day in June.

“That’s what is needed by customers,” he said. “That’s what they are asking for. They are not asking for 10 million barrels a day.” He added that “there is no shortage of supply,” but said raising the production ceiling is still “reasonable".

Naimi is set to fly to Vienna on Monday ahead of an Organisation of Petroleum Exporting Countries meeting on Wednesday.

At that meeting, a 1.8% increase in the group’s production ceiling to 28 million barrels a day is likely.

Naimi attributed the current high crude prices to constraints in the worldwide refining system.

“That is where the bottleneck is,” he said.