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 Brent crude was trading down 82 cents at $62.63 by 1120 GMT, down
from an intraday peak of $64.34. U.S. crude for May delivery was
down 42 cents at $55.32 a barrel, down from an early high of $56.65.
"I have said many times we will always be happy to supply to our
customers with what they want. Now they want 10 million," Naimi told
Reuters on Monday in Seoul, where he is due to attend a board
meeting of the state oil firm Saudi Aramco [SDABO.UL].
Naimi earlier this month said Saudi Arabia produced 10.3 million bpd
of crude in March, eclipsing a previous record of 10.2 million bpd,
in what is seen as a move to defend market share against non-OPEC
competition, including the United States.
U.S. oil drilling rigs fell for a record 19th straight week to the
lowest since 2010, data from oil services firm Baker Hughes showed,
which has helped lift prices from six-year lows reached in January.
Since the beginning of April, oil prices have risen around 17
percent, pushed up by reports of a possible dip in U.S. output, but
Morgan Stanley warned that Saudi production could be more important
than developments in the United States.
"We worry about the market's fixation on the U.S. ... OPEC
production may be more important as production increased 1 million
barrels per day month-on-month in March. Saudi Arabia alone added
the equivalent of half of Bakken (the largest U.S. shale oilfield)
production in a matter of months – far beyond any U.S. slowdown,"
the bank said in a note.
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Hedge funds and other money managers raised their net long positions
to a record 263,578 contracts in the week to April 14, according to
data from InterContinental Exchange (ICE) released on Monday.
Despite the view of hedge funds and large speculators, analysts said
the recent price recovery may be short-lived.
"A bottoming-out process for oil prices is likely to be tangible, in
our view, only if the trajectory of demand improvement and supply
adjustment holds firm momentum," Barclays said.
"This is not the case, however, as current supply/demand dynamics
... are not firmly moving in the direction to tighten market
balances in Q2," it added.
(Additional reporting by Henning Gloystein and Jacob Gronholt-Pedersen
in Singapore; Editing by Dale Hudson and William Hardy)
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