Al-Falih hopes global slowdown won’t hurt demand for oil

Saudi Arabia hopes that slower economic growth worldwide won’t reduce demand for oil, the kingdom’s energy minister Khalid Al-Falih told a German newspaper.

“At the moment we see healthy demand for oil," the minister told business daily Handelsblatt. “That said, there are economic headwinds in some important markets and we hope this does not trigger a slowdown in global demand.”

Oil prices hovering around $50 per barrel were too low, Al-Falih added, noting that prices need to be between $50 and $100 for the industry to sustain investments.

Although the oil market is heading towards a rebalancing – on account of crude supplies plunging by about a million barrels per day, and a recovery in demand – concerns of oversupply remain, he said.

“There are still excess stocks on the market - hundreds of millions of barrels of surplus oil. It will take a long time to reduce this inventory overhang.”