DUBAI: Long term oil market fundamentals are robust and short-term price moves have little meaning for Saudi Arabia, the kingdom's deputy oil minister, Prince Abdulaziz Bin Salman Bin Abdulaziz, was quoted as saying on Wednesday by the Saudi Press Agency.
"Temporary factors such as concerns about global economic recovery, geopolitical events, and positioning in paper markets, can affect short-term price movement," he was quoted as saying.
"But for a major oil producer and exporter such as Saudi Arabia with long-term interest in the stability of the market, such daily, weekly or even monthly gyrations have little meaning, and constitute a source of noise around a solid trend."
"Supply and demand patterns indicate that the long-term fundamentals of the energy complex remain robust," he added.
The prince noted what he called the widely circulated view that lower US dependence on oil imports from the Gulf would erode "the United States interest in the Middle East, and its special relations with the GCC," a reference to the six-country Gulf Cooperation Council that includes Saudi Arabia.
But historically, SPA quoted Prince Abdulaziz as saying, the US reliance on imports from Saudi Arabia had been modest, and shifts in GCC exports to the US were dictated by market conditions and commercial considerations.
The United States could not isolate itself from supply shocks, he said. But in the event that the United States became self sufficient, supply disruptions could still prove costly not only in their direct impact on the US economy, but also indirectly through their impact on its trading partners.
"Supply shortages will lead to a scramble for oil, which will translate into higher prices impacting the global economy and feeding eventually into the US economy," he said.
"For supply shocks to have no impact, the US would have to cut off its economy and its domestic oil markets from the rest of the world through isolationist policies, which is highly unrealistic and economically counterproductive," he said.
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