Saudi Arabia's Naimi says "no reason" for OPEC to reduce output

New Delhi (Platts)--27Jan2006

Saudi Arabian oil minister Ali Naimi Friday said there was no reason for
OPEC to cut crude output at its meeting next week as oil prices remain near
record highs and there is no demand for additional crude. 

     "There is no reason to reduce output, so OPEC will continue at current
level," Naimi told reporters in New Delhi, adding he wants oil prices to "come
down," without elaborating. 

     On Monday, Naimi was quoted as saying global oil prices were on the high
side but that they would fall to a range of $40-$60/bbl if factors causing
volatility in the market were eliminated. He also saw no need to increase
Saudi crude oil production beyond an average 9.5-mil b/d which he said the
kingdom was producing and hinted OPEC did not need to change its production
ceiling when it meets in Vienna Jan 31.

     Naimi gave the interview a the television channel in the Saudi capital
Riyadh before joining King Abdullah on a four-nation tour of Asia, which
kicked off in China Sunday and includes India, Pakistan and Malaysia.

     Speaking ahead of their departure from New Delhi, Saudi Arabia's King
Abdullah said that oil prices were too high and were damaging the developing
countries. Abdullah attributed high prices to market speculation, a rise in
demand and refinery and infrastructure shortage in major oil producing
countries. 

     In the first visit to India by the Saudi monarchy in over 50 years, the
two countries focused on energy cooperation during official meetings. India
and Saudi Arabia signed four separate agreements to combat crime/terrorism,
promote investment, double taxation avoidance treaty and cooperation in the
field of sports.

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