Saudis will produce whatever oil customers need: Gulf source

London (Platts)--7Jun2006

Saudi Arabia will produce as much or as little oil as its customers ask
for, a Gulf source said Wednesday, confirming remarks by the country's oil
minister in a newspaper interview that Saudi crude production had declined in
recent months because of lower demand.
The kingdom "will produce whatever the customers will ask," the Gulf
source said. Saudi Arabia "negotiates every month" with its customers, he
said, "and if they ask for more [the Saudis] give them more, if they ask for
less, [the Saudis] give them less."
Saudi oil minister Ali Naimi told the Wall Street Journal in an interview
published Tuesday that his country pumped just 9.1 million b/d in April
because of a dearth of buyers. Most independent estimates have pegged Saudi
crude output around 9.5 million b/d in recent months.
The Gulf source said between 2.5 and 3 million b/d of global refining
capacity was currently offline as a result of maintenance programs and other
reasons which he did not specify. "When they come back they will start asking
for more," he said.
"My personal feeling is that the market will pick up in the second half"
of the year, the Gulf source said.

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