Saudi Official: Oil Prices Unlikely to Fall

By ASHOK SHARMA

NEW DELHI – Saudi Arabia’s oil minister said Friday that oil prices, now hovering above $65 a barrel, are unlikely to fall in the near term because of factors beyond the market’s control.

“I have no control over prices,” Ali Naimi told reporters in New Delhi, where India and Saudia Arabia agreed to develop a more strategic energy partnership. “We accept that they’re high, and of course, we want them to come down.”

Oil prices have moved higher since the start of the year because of supply concerns stemming from violence in Nigeria and a dispute between Iran and the international community over Tehran’s nuclear plans.

In the “Dehli Declaration” signed by Saudi King Abdullah and Indian Prime Minister Manmohan Singh, the two countries agreed to tighten their energy relationship, which is based on interdependence.

This would be achieved through increased volume of crude oil supplies to India, Saudi investments in oil refining, marketing and storage in India and setting up of India-Saudi ventures for gas-based fertilizer plants in Saudi Arabia, the declaration said.

The Saudi king told reporters that this was the first declaration he has signed with any country, and that it was “aimed at strengthening relations between Saudi Arabia and India.”

Saudi Arabia currently supplies almost 175 million barrels of crude oil a year to India – roughly a quarter of the country’s needs.

India, which imports 70 percent of the oil it consumes, is also looking for fresh supplies from Central Asia and South America.

Naimi’s remarks came ahead of a closely watched meeting of the Organization of Petroleum Exporting Countries in Vienna Tuesday, where the group will discuss production policy.

The kingdom is understood to be the only OPEC member with significant spare capacity to pump more.

Benchmark U.S. light sweet crude oil futures tested the $70-a-barrel mark earlier this week, and were above $66 per barrel trading Friday.

The Saudi King is scheduled to return home later Friday, concluding his visit to China and India.