Saudi's Falih Says Oil Price Above $50 Needed For Investment


BERLIN, July 12 (Reuters) - The oil industry needs a price of more than $50 per barrel to sustain investments, Saudi energy minister Khalid al-Falih told a German newspaper while adding that downward pressure on prices would prevail because of a huge stocks overhang.

"We need a price higher than $50 to achieve a balance in oil markets in the long term," Falih, who took over earlier this year from veteran Saudi oil minister Ali al-Naimi, told German business daily Handelsblatt.

"And just as $50 is too low to sustain investment, prices in excess of $100 are too much. The optimum lies somewhere in between," he said.

Falih said the oil markets were rebalancing thanks to output drops in countries such as the United States but it would take a long time before balance was achieved.

"We have seen a decrease in supply by roughly one million barrels of crude oil per day," he said, referring to output in the United States and 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."

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

(Reporting by Joseph Nasr; editing by Madeline Chambers and Jason Neely)

Copyright 2017 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Business Analyst
Expertise: Project Management
Location: Houston, TX
United States Rock Springs: Field Service Quality Coordinator - Cementing
Expertise: Operations Management|Planner / Scheduler|Production Engineering
Location: Rock Springs, WY
Field Project Assistant
Expertise: Project Management
Location: Midland, TX
search for more jobs

Brent Crude Oil : $52.42/BBL 2.12%
Light Crude Oil : $49.51/BBL 2.35%
Natural Gas : $3.17/MMBtu 2.25%
Updated in last 24 hours