09/25/2009
Saudi Arabia’s oil minister made comments on Sept. 22 that indicated there is healthy demand from Asia, including China, where oil demand in August rose 2.9 percent from the year prior. Saudi Oil Minister Ali al-Naimi said demand for Saudi crude was increasing "and so we are…convinced that economic growth is started and will continue,” Naimi said
Even with the increased demand, Naimi said Saudi Arabia does not plan to boost output any time soon as he believes the global economy has not yet rebounded enough. His production commitment for Saudi Arabia means the Kingdom will be keeping as much as 4.5 million bpd of production idle. Despite all of the unused capacity, he said that Saudi Arabia is committed to investing heavily in the oil sector going forward.
He reiterated that Saudi Arabia was interested in diversifying its energy resources into alternative industries like solar power. Though he said that there would be no let up in the Saudi investment in traditional energy sectors, he said the Kingdom was "continuously investing because we believe that it is the right thing [to do]."
With Saudi Arabia holding production unchanged at the same time that the world economies begin to recover from their economic recessions, this will put further pressure on world oil supplies. The Department of Energy recently estimated that world liquid fuels consumption will rise from an average of 83.68 million barrels per day in 2009 to an average of 84.60 million bpd—a year-over-year increase of 1.1 percent.
With countries such as Saudi Arabia looking to keep production largely unchanged until it sees sufficient world growth to justify output increases, this means the world will need to turn even more efforts toward increased renewable fuel production to meet the world's growing demand for energy.