Saudi Arabia: Bullish on Oil (PDF)

Saudi Arabia’s Finance Minister Ibrahim al-Assaf dismissed the International Monetary Fund’s (IMF) forecasts for a contraction in the Saudi economy this year, saying they were based on overly pessimistic IMF forecasts for oil prices. Meanwhile Saudi Arabia’s Oil Minister Ali al-Naimi has echoed a more positive outlook for oil prices, highlighting - to the press - the view that crude oil would eventually rise to USD75 a barrel as global demand recovers. He added that current oil prices reflect expectations that the market would pick up.

Minister Ali al-Naimi also said that while compliance by OPEC members was good it could be improved. He said Saudi Arabia is currently pumping a little less than 8 million barrels a day and will have a capacity of 12.5 million barrels by June of this year. It is our view that oil prices (ICE Brent) will average USD57 and USD67 in Q3-2009 and Q4-2009 respectively, and average USD77 during 2010. We believe Saudi Arabia is taking very strong monetary and fiscal policy measures to support its economy and as such we forecast the Saudi economy to achieve a growth rate of 1% during 2009.