Saudi Arabia's oil minister Ali al-Naimi believes lower oil prices will stimulate global economic growth
Saudi Arabia's oil minister, Ali al-Naimi, has said oil producers' cartel Opec will not cut production even if the price falls to $20 a barrel!
His comments reinforce OPEC's recent policy change away from restricting output as prices fall.
The Brent crude oil price has fallen by more than 46% since its $116 June peak.
Speaking to the Middle East Economic Survey, Mr al-Naimi said: "As a policy for OPEC - and I convinced OPEC of this, even Mr al-Badri [OPEC secretary general] is now convinced - it is not in the interest of OPEC producers to cut their production, whatever the price is.
"Whether it goes down to $20, $40, $50, $60, it is irrelevant," he said.
The world might not see the oil price back at $100 a barrel again, he added.
While alternative sources of crude oil, such as shale and tar sands, have caused a big increase in supply, some analysts argue that the oil price collapse is more to do with falling demand due to a slowing global economy.
Danny Gabay of Fathom Financial Consulting told the BBC that the oil price fall was "overwhelmingly, predominantly, if not entirely, a demand shock. It's China slowing down. The supply element is more of a reaction."
International Monetary Fund (IMF) economists have speculated that the low oil price could boost the global economy by up to 0.7% in 2015.
ITAR-TASS: 24 December 2014
Putin says oil market price conspiracy between Saudi Arabia and US not ruled out
However, it is not possible to confirm the data, the Russian president says
Russian President Vladimir Putin does not rule out the possibility of a price conspiracy between Saudi Arabia and the US on the market of energy resources but says it is not possible to confirm the data.
“There’s a lot of talk around” in what concerns the causes for the slide of oil prices, he said at a major annual news conference. “Some people say there is conspiracy between Saudi Arabia and the US in order to punish Iran or to depress the Russian economy or to exert impact on Venezuela.”
“It might be really so or might be different, or there might be the struggle of traditional producers of crude oil and shale oil,” Putin said. “Given the current situation on the market the production of shale oil and gas has practically reached the level of zero operating costs.”
“If this rate is kept up, everything will fall apart (in the production of shale oil — TASS) and the prices will start climbing,” he said. “But we can’t tell this with a hundred percent assuredness.”
He believes the interests of the US Administration and main producers of oil may coincide at the moment because Washington treats investment in the production of shale oil by private companies very quietly.
“The main thing for us is the overall level of prices but the low price is kept for too long, the companies will stop investing in new deposits,” Putin said.
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