Saudi Arabian Oil Minister Ali al- Naimi said demand for crude will hold strong from Asian buyers as the U.S. produces more of its own fuel.
“The expectations of energy demand and growth are still positive,” al-Naimi said in a speech in Doha, Qatar, carried by official Saudi Press Agency. “I was in Hong Kong recently and I felt optimism towards the future growth of the region.”
Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, kept output unchanged in March from February at 9 million barrels a day, according to a Bloomberg survey. Demand for OPEC crude was estimated to average 29.7 million barrels a day in 2013, OPEC said in a monthly report on March 12. That’s a drop of 400,000 barrels a day from last year and down 100,000 barrels a day from February’s report, it said. OPEC supplies about 40 percent of the world’s crude.
“With the U.S. becoming more self-sufficient in energy due to increased production of oil from shale formations, OPEC countries will need to search for more buyers for their crude in Asia and other emerging markets,” Charles Dewhurst, head of the global energy practice for BDO USA LLP, an accounting and consulting firm, said in a phone interview.
Naimi said Saudi Arabia and other Arab producers in the Persian Gulf “welcome access of all sources of new energy to the market.” He said producers shouldn’t be worried about new supplies as global demand is growing.
“It is true that there are more companies and countries that compete to win a bigger share of the market, but it is also true that the market is large,” al-Naimi said.
The Saudi minister said increased production of unconventional oil in Canada will have “some effects” on the global market, while Australia will become a major exporter of natural gas liquids to Asia.
“U.S. refineries are configured to process heavy and sour crude and that makes Canadian oil a perfect match for U.S. refiners and adds to North American energy independence,” Dewhurst said. OPEC producers shouldn’t feel threatened by North American production as they still enjoy a lower cost of production, he said.