Saudi minister hopes slower global growth won’t hit oil demand

Saudi Arabia hopes that slower global growth will not trigger a fall in the current healthy demand for oil, Energy Minister Khalid al-Falih told a German newspaper in an interview published on Tuesday, adding oil prices of around $50 per barrel were too low.

“Ultimately, market fundamentals, or supply and demand, are the primary determinant of the oil price, and at the moment we see healthy demand for oil,” he told German business daily Handelsblatt.

“That said, there are economic headwinds in some important markets and we hope this does not trigger a slowdown in global demand,” he added.

He said oil prices need to be somewhere between $50 and $100 per barrel for the industry to sustain investment.

“We have seen a decrease in supply by roughly one million barrels of crude oil per day,” he said, referring to fracking in the U.S. and oil sands in Canada.

“At the same time, demand has recovered, meaning that supply and demand are now more balanced again. But there are still excess stocks on the market – hundreds of millions of barrels of surplus oil. It will take a long time to reduce this inventory overhang.”

Source: Reuters