Al-Falih: Oil would have been back to three digits if production wasn’t hiked

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Oil prices would have been back to three digits if Saudi Arabia hadn’t taken steps to balance the oil market said Khalid A. Al-Falih, Minister of Energy, Industry and Mineral Resources of Saudi Arabia.

The minister said that Saudi Arabia, the world's biggest oil exporter, is committed to meeting India’s rising oil demand as the Kingdom expects its oil production to rise next month from the current 10.7 million barrels per day, Saudi Energy Minister Khalid al-Falih said on Monday.

India, the world's third-biggest oil importer, is grappling with a combination of rising oil prices and falling local currency.

Retail prices for gasoline and diesel fuel in India are at record highs and the government has cut its excise tax on fuel to ease some of the pain for consumers.

While there are many factors that could influence global oil prices, Saudi Arabia and other major producers will continue to act to cushion the market from oil price shocks, Falih said at the IHS CERA conference.

"We could have another (round of) unanticipated disruptions that we have seen in Nigeria, Libya, Venezuela. And we have seen sanctions on Iran. These supply disruptions need a shock absorber and the shock absorber to a large extent has been Saudi Arabia," he said.

"We have invested tens of billions of dollars to build spare capacity of 2-3 million barrels per day over years. That is equivalent to the production capacity of major producers."

Saudi Arabia has the capacity to produce 12 million bpd and is currently producing 10.7 million bpd, Falih said, adding that production will rise further next month.

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