IEA Head Rules Out Further Drop in Oil Output This Year

From Saudi Gazette

The Executive Director of the International Energy Agency (IEA) Maria Van der Hoeven said Monday she doesn’t see a further decline in global crude production in 2013.

Saudi Arabia cut its oil production by close to 5 percent to 9.025 million barrels a day in December in response to lower demand chiefly from Asian customers, and comes amid expectations for lower demand for crude oil from the Organization of the Petroleum Exporting Countries this year.

Asked by Dow Jones Newswires in an interview if the market is likely to see further production cuts this year, Van der Hoeven said: “I don’t think so.”

“What strikes me when looking at Saudi Arabia is that they always have a very, very keen eye on the demand of the market,” she said. She declined to comment about the current oil price but said that, “OPEC met demand and they did it in a very reliable way.”

Demand has been slowing down in Asian and European countries “and we have also seen that stocks have been built, there is a lot of oil, floating stocks, traveling in ships,” she said. But there were some signs that the global economy is recovering and that the economic picture could change this year, Van der Hoeven said.

Saudi Arabia has played an important role in the past two years as one of the few countries with sufficient spare production capacity to respond to market changes. It raised production substantially to fill supply gaps caused by the war in Libya in 2011 and kept it high after the West imposed tough oil sanctions against Iran last year.

Increased oil production is also expected from regions outside OPEC such as the North Sea and Brazil, she added.

Ibrahim Al-Muhanna, the advisor to Saudi Arabia’s oil minister, said earlier Monday that the Kingdom is optimistic that global economic uncertainties will pass and growth will resume this year, adding that the Gulf state stands ready to react to these changes.

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