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Saudi Arabia says won't limit oil production, can meet customer demand

Published 30/12/2015, 14:07
© Reuters. File picture of Saudi Arabian Oil Minister al-Naimi talking to journalists before a meeting of OPEC oil ministers at OPEC's headquarters in Vienna

KHOBAR, Saudi Arabia (Reuters) - Saudi Arabian Oil Minister Ali al-Naimi said the kingdom, the world's top crude exporter, does not limit its output and has the capacity to meet additional demand, state television Al Ekhbariya reported on Wednesday.

"The increase in production depends on ... the demand of the customers. We meet our customers' demand, there is no longer a limit to production, as long as there is demand, we have the ability to meet demand," Naimi said.

The Wall Street Journal, which reported the same comments as Al Ekhbariya, also quoted Naimi as saying Saudi Arabia's oil policy was "reliable" and would not change. He has made similar comments in the past when asked about plans to boost production.

On Monday, Saudi Arabia, its finances hit by low oil prices, announced plans to shrink a record state budget deficit with spending cuts, reforms to energy subsidies and a drive to raise revenues from taxes and privatisation.

Saudi Arabia's planned cuts in spending and energy subsidies signal the kingdom is bracing for a prolonged period of low oil prices which this month hit their lowest levels since 2004.

"We expect - from now on - efficiency of energy consumption to increase, which means the energy consumed will be reduced," Naimi said, in reference to the recent subsidy reforms.

On Monday, Saudi Aramco's chairman Khalid al-Falih said his country was better equipped to wait out low oil prices than other producers.

The comment by the head of the state oil company was in linewith Saudi Arabia's no-cut oil policy on output despite a sharpfall in global oil prices since mid-2014.

© Reuters. File picture of Saudi Arabian Oil Minister al-Naimi talking to journalists before a meeting of OPEC oil ministers at OPEC's headquarters in Vienna

Saudi Arabia led a shift in OPEC policy last year by rejecting calls to reduce production to support prices, choosing instead to defend market share.

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