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| Former Saudi oil boss says it can handle low price | |
| (about 5 hours later) | |
| Saudi Arabia can cope with low oil prices for "at least eight years", Saudi Arabia's minister of petroleum's former senior adviser has told the BBC. | Saudi Arabia can cope with low oil prices for "at least eight years", Saudi Arabia's minister of petroleum's former senior adviser has told the BBC. |
| Mohammed al-Sabban said the country's policy was to defend its current market share by enduring low prices. | Mohammed al-Sabban said the country's policy was to defend its current market share by enduring low prices. |
| "You need to allow prices to go as low as possible in order to see those marginal producers move out of the market," he said. | "You need to allow prices to go as low as possible in order to see those marginal producers move out of the market," he said. |
| Mr al-Sabban advised the ministry for 27 years, leaving last year. | Mr al-Sabban advised the ministry for 27 years, leaving last year. |
| Saudi Arabia, the largest producer within the Opec oil producers' cartel, has repeatedly said that it will not cut output to try to boost the oil price. | Saudi Arabia, the largest producer within the Opec oil producers' cartel, has repeatedly said that it will not cut output to try to boost the oil price. |
| Mr al-Sabban said Saudi Arabia's "huge financial reserves" would enable it to cope with the low oil price. | |
| The country is now in the process of cutting government spending. | The country is now in the process of cutting government spending. |
| Without these cuts, Mr al-Sabban said, Saudi Arabia could not cope with low oil prices for more than four years. | Without these cuts, Mr al-Sabban said, Saudi Arabia could not cope with low oil prices for more than four years. |
| Falling further | Falling further |
| Oil prices have more than halved since June. | Oil prices have more than halved since June. |
| The dramatic fall has been blamed on a sharp increase in production from North American shale companies, which has increased the supply of oil and gas, helping to depress prices. | The dramatic fall has been blamed on a sharp increase in production from North American shale companies, which has increased the supply of oil and gas, helping to depress prices. |
| Also undermining the price of oil are slowing global economic demand and a rising dollar against a range of other currencies. | Also undermining the price of oil are slowing global economic demand and a rising dollar against a range of other currencies. |
| The latter can flatter the oil price, which nonetheless can remain the same price in a local currency that buys fewer dollars. | The latter can flatter the oil price, which nonetheless can remain the same price in a local currency that buys fewer dollars. |
| On Monday, Brent crude was trading at around $49.40 a barrel, down 77 cents, and US crude was trading down 74 cents at $47.95 a barrel. | On Monday, Brent crude was trading at around $49.40 a barrel, down 77 cents, and US crude was trading down 74 cents at $47.95 a barrel. |
| The falls came after Saudi Arabia said again on Sunday that it would not cut output to prop up oil markets. | The falls came after Saudi Arabia said again on Sunday that it would not cut output to prop up oil markets. |
| Referring to countries outside of Opec, Saudi oil minister Ali al-Naimi said: "If they want to cut production they are welcome. We are not going to cut, certainly Saudi Arabia is not going to cut." | Referring to countries outside of Opec, Saudi oil minister Ali al-Naimi said: "If they want to cut production they are welcome. We are not going to cut, certainly Saudi Arabia is not going to cut." |