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Saudi’s Naimi expects oil demand, prices to rise

19 Jun 2015 06:35 (+01:00 GMT)
Saudi's Naimi expects oil demand, prices to rise

London, 19 June (Argus) — Saudi Arabia's oil minister Ali Naimi said he is optimistic that oil prices will rise during the next few months.

"I am optimistic about the future of the market during the next few months with regard to a continued improvement and increase in global oil demand and a fall in the level of commercial stocks, followed by an improvement in prices," Naimi was quoted as saying by the government Saudi Press Agency (SPA).

Speaking in Russia's St Petersburg after signing an energy co-operation agreement with Russian energy minister Alexander Novak, Naimi said the accord would boost bilateral co-operation, as well as co-operation "regarding the international oil market".

"Co-operation and co-ordination" between Russia and Saudi Arabia "will enter a new phase at the bilateral and international levels and will be continuous, leading to the establishment of an oil alliance between the two countries in the interest of the international oil market, producing countries and the stability and improvement of the market", said SPA.

Saudi Arabia has indicated that it is unwilling to abandon its strategy of defending its oil market share rather than oil prices unless other non-Opec producers, including Russia, are willing to join Opec in cutting output.

Naimi's words indicate that he may have reached an agreement with his Russian counterpart under which Russia could participate in a possible future Opec output cut. But the Saudi minister has previously shown scepticism that Moscow would follow through with any cuts that it might pledge, particularly since it failed to deliver on such a pledge 15 years ago.

Naimi is on a visit to Russia as part of a wider Saudi delegation led by Saudi Arabia's new deputy crown prince and defence minister Prince Mohammad bin Salman. The oil co-operation agreement is part of a wider drive to build closer relations between the two countries, which have also signed two other major agreements to promote joint economic investment and to co-operate in the field of peaceful nuclear energy. SPA said the nuclear energy co-operation agreement aims to support Saudi Arabia's "ambitious programme to diversify its energy resources by introducing an integrated system in which nuclear energy will play an active role".

Riyadh has signed a series of agreements with several countries for co-operation in the field of peaceful nuclear energy, but has faced US opposition to its intention of exploiting Saudi Arabia's own uranium deposits for the production of nuclear energy.


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