Saudi Oil minister Ali Al Naimi once again said that Saudi Arabia has no plan to expand its oil capacity, despite escalating demands for oil supllies and rising alternative fuel supplies. The long term oil demand is seen falling, the reason why Al Naimi has to say no to oil capacity expansion.
The price of oil was divorced from oil market fundamentals, Al-Naimi said. Oil has become a hedge for investors, like gold, against the falling value of currencies, he added.
“That is the reason for the pressure on the price of oil,” he said.
US crude hit a record of $117 a barrel on Friday.
Rising costs for materials, construction and oil service con
tracting has pushed up the cost of adding new oil output capacity in Saudi Arabia to between $5000 and $8000 per barrel, Al-Naimi said.
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