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OPEC’s November decision not to intervene in oil markets was historic, and time will show it was the correct path, Saudi Arabian Oil Minister Ali Naimi said this week. Dismissing talk that Saudi Arabia and OPEC had declared war on shale oil or that the shift in policy spelled the death of OPEC, Mr Naimi made clear that the kingdom and its OPEC allies would no longer subsidize higher cost producers by ceding market share.
Speaking at the German-Arab Friendship Association in Berlin on 4 March, Mr Naimi gave his assessment of market moves since the 27 November OPEC meeting, at which he was instrumental in steering the 12-member producers’ club to hold production steady, despite signs of weakening demand and prices: “From my perspective, demand is gradually rising, global economic growth seems robust, and the oil price is stabilizing,” Mr Naimi told the audience. Saudi Arabia’s bid for market share was simply an effort to satisfy rising consumer demand, he added. Ultimately, OPEC sought calm markets that benefit everyone, he says.
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