Saudi Oil Output Near Record High
A file photograph of Saudi Arabia's Oil Minister Ali al-Naimi.Reuters

Saudi Arabia's Oil Minister Ali al-Naimi has said his nation is producing near record levels of crude oil in April.

Naimi said oil production in Saudi Arabia, the world's top crude exporter, was around 10 million bpd in April.

On Saudi Arabia's position on Opec output at the oil cartel's next meeting on 5 June, Naimi said all producers should cooperate to stabilise the market.

Naimi, speaking to Reuters in Seoul, where he is due to attend a board meeting of state oil firm Saudi Aramco, said: "I have said many times we will always be happy to supply to our customers with what they want. Now they want 10 million."

He added: "You know I have said many times stability of the market depends on cooperation among producers, consumers and industries. So, yes we need cooperation of all producers to stabilise the market."

Rising production in Saudi Arabia and other Opec members could stamp out a recent rebound in oil prices, particularly with economic growth in China, the world's second-largest economy, hovering at its slowest pace in six years.

Chinese demand

Naimi said on 20 April that Saudi Arabia was supplying about a million barrels per day (bpd) to China, the world's biggest net oil importer, and he expected Asia's demand to grow.

Asked whether he was worried about Chinese oil demand given the nation's growth slowdown, Naimi said: "We have seen no change in oil demand. We are still supplying the same volume as we have been supplying for some time.

"I believe demand over time will continue to grow. We are very positive in that sense. There is absolutely no concern from our side. We haven't seen any change since the prices changed.

Oil prices have risen some 17% this month, buoyed by reports of a possible dip in US output, but Morgan Stanley has warned that Saudi production could be more important than developments in America.

The Wall Street bank said in a note: "We worry about the market's fixation on the US... Opec production may be more important as production increased one million barrels per day month-on-month in March.

"Saudi Arabia alone added the equivalent of half of Bakken (the largest US shale oil field) production in a matter of months – far beyond any US slowdown."

Earlier in the month, Naimi said Saudi Arabia produced some 10.3 million bpd of crude in March, beating a previous high of 10.2 million bpd in August 2013, according to records going back to the early 1980s.

Opec has been battling to retain customers after losing market share to new producers, such as shale in the US, and decided not to slash output at the cartel's meeting last November.

That decision hit oil prices hard and sparked calls from some producers, even within Opec, to relax the stance and slash output.