Oil price drop will aid economic recovery: Saudi minister

January 14th, 2009 - 10:40 pm ICT by IANS  

New Delhi, Jan 14 (IANS) The drop in oil prices will help the global economy to recover, said Saudi Arabian petroleum minister Ali Al-Naimi here Wednesday.”The price of oil has declined in recent months by more than 70 percent since reaching their highest level in July, a drop that will play a major role in aiding economic recovery,” said Al-Naimi in his speech at the Petrotech international oil and gas conferece.

At the same time, he asserted, this drop would also hit the oil sector. “At lower oil prices, we may find it difficult to explore new oilfields,” Al-Naimi warned.

International crude prices dropped from a peak of around $147 a barrel to $40 Tuesday.

Al-Naimi said his country would like to help to stabilize the world oil market.

“Stability means oil prices maintained at a level that encourages investment, helping create a climate conducive to the development of all viable energy sources. Stability is also defined as a level providing a reasonable return to producing nations, and one that does not harm the global economy, and particularly does not hinder the prospects of developing economies,” he said.

Later, on the sidelines of the event, Al-Naimi told reporters that the Oil Producing and Exporting Countries (OPEC) wanted to make crude prices more stable and decrease volatility in the market.

“The purpose of what we are doing (in Opec) is to lessen volatility in the market, bring back stability and make it much predictable,” he said.

The Saudi minister had earlier said his country would be cutting back on oil production much below the OPEC cut.

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