Nathan Bomey

USA TODAY

The Saudi oil minister on Tuesday ruled out the prospect of production cuts by the Organization of the Petroleum Exporting Countries, signaling that rock-bottom oil prices won't go away anytime soon.

Ali bin Ibrahim Al-Naimi, minister of petroleum and mineral resources for Saudi Arabia, told conference-goers at the 35th annual IHS Energy CeraWeek convention in Houston that ongoing efforts to keep production at January levels is "the beginning of a process" that's "going to take time."

"If we can get all of the major producers to agree not to add additional barrels, then this high inventory we have now will probably decline in due time," he said. "It is not like cutting production. That is not gonna happen because many countries are not going to deliver. Even if they say they will cut production, they will not deliver."

Oil production rate will slow, IEA projects

OPEC countries and Russia have been negotiating a potential freeze in production at January levels. Investors hope such a move would spark a recovery in prices. But Iran, which is critical to a deal, isn't expected to abandon its plans to increase production to pre-sanctions levels.

Gasoline prices below $2 per gallon at most U.S. stations have been a boon to consumers, but low oil prices — which dipped below $27 earlier this month, a level not seen in 12 years — has placed many U.S. shale oil producers on the edge of insolvency, led to more than a quarter million global job cuts in 2015 and slammed government budgets that rely on petroleum taxes.

The price of oil tumbled as Al-Naimi was speaking Tuesday morning and continued sliding afterward, as investors absorbed the possibility that U.S. crude oil supplies will remain high for a prolonged period.

Brent crude, the global benchmark, fell 4.1% to settle at $33.27. West Texas Intermediate, the U.S. benchmark, fell 4.6%, to settle at $31.87.

Al-Naimi, whose remarks about crude oil often affect the market, also said that he's not concerned about global demand for fossil fuels. He was visiting the influential IHS CeraWeek conference for the first time since 2009.

"The fact is that demand was and remains strong," he said. "You can argue over small percentage falls and rises but the bottom line is that the world demands and gets more than 90 million barrels of day of oil. Long term this will increase. So I have no concerns about demand. That’s why I welcome new additional supplies, including shale oil."

Tuesday's downturn in oil prices came a day after prices rebounded as the International Energy Agency projected a sharp decline in oil production growth rates over the next half decade.

The IEA said a rapid decline in investments in exploration and production activities will lead to an average of 4.1 million barrels per day in new production from 2015 through 2021.

That compares to the boom-time rate of 11 million barrels per day in new production from 2009 through 2015.

The IEA suggested that oil prices would "start to rise gradually" as production falls, but cautioned that abundant sources of potential new output "will limit the scope of rallies — at least in the near term."

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.