Saudi says world has enough oil despite Libya turmoil

City A.M. Reporter
World markets have plenty of oil, top exporter Saudi Arabia has said, as a wave of revolution has tightened its grip on OPEC member Libya, driving prices to a two-and-a-half-year high.

Energy ministers have arrived in the Saudi capital Riyadh on the eve of talks designed to narrow the gap between producer and consumer nations.

The formal agenda could be overwhelmed by concern anti-government protests will drive oil prices still higher.

Oil has climbed above $106 (£65.20) as energy firms recalled international staff from Libya and spreading unrest shut down some 100,000 barrels per day of production there.

It was the first output disruption since popular unrest erupted in Tunisia, ousting its president, before spreading to Egypt, where it unseated Hosni Mubarak after 30 years of rule.

Libyan leader Muammar Gaddafi's four-decade-rule also appeared in jeopardy as protests reached the capital Tripoli for the first time.

Saudi Oil Minister Ali al-Naimi will open proceedings at the International Energy Forum with a speech on Tuesday, but has declined to comment to reporters.

His deputy Prince Abdulaziz bin Salman Al-Saud told a news conference the market had plenty of oil.

"We're much more focused on how the market balance is, is it sufficiently supplied? And the answer is 'yes, abundantly,' therefore does the situation warrant any kind of intervention? I don't think so," he said.

He also reiterated the long-held Saudi view $70-$80 was the fair price for oil.

"It is justified because it enables producers to invest, it is justified because it does not harm consumers."

Even though oil prices are well above those levels, OPEC ministers have repeatedly said the market has enough supply and the Organization of the Petroleum Exporting Countries has no plans to meet formally to reassess output until June.

Iran, OPEC's second largest oil producer after Saudi Arabia and holder of the rotating OPEC presidency, was among several oil ministers who will stay away from Tuesday's talks, delegates said.

Its anticipated absence was interpreted as another clue OPEC was not ready to react to rising oil prices with a formal output decision.