Saudi king 'unhappy' over oil price

SOFTER PRICE: The world's top oil exporter Saudi Arabia wants to see lower oil prices, King Abdullah has said. (Getty Images)

The world's top oil exporter Saudi Arabia wants to see lower oil prices, Saudi's King Abdullah said in an interview with Italian newspaper La Repubblica.

The price of oil hit a record of $147.27 a barrel on Friday and has doubled in a year, sparking fuel protests worldwide and stoking inflation.

Asked whether Saudi Arabia wanted to "soften the price" of oil, the Saudi monarch was quoted as saying.

"Of course that is the case: we did not want and do not want the price to be this high. It is not in our interest because it is not in the interest of the rest of the world."

Saudi Arabia was pumping at 9.7 million barrels per day in July, the fastest rate for 27 years an increase of 550,000 bpd from two months ago.

"Listen to me. I am speaking for myself and for the Kingdom of Saudi Arabia. When the price of oil hovered around $100 a barrel, we were already unhappy. Imagine what we feel like now, when there is talk of $200," the Saudi ruler said.

Speculation was the main factor behind the surge of oil prices, Abdullah reiterated in the interview, which was also published in pan-Arab daily Asharq Al-Awsat.

The global oil market has not responded to output capacity increases by the kingdom and other producers, he said.

"Despite the implementation by the kingdom and a number of producing nations of production capacity increases, we did not feel a response from the global oil market," the monarch said.

This showed the price of oil was affected by factors other than supply and demand, he said.

"The most important of which [factors] is speculation in the global oil market and the imposition by many consuming nations of additional taxes on oil," he said.

OPEC officials have repeatedly blamed factors beyond their control such as speculation and the weak dollar for oil's rise.

Saudi Oil Minister Ali Al-Naimi said last month that the world's biggest oil exporter was ready to pump more for the rest of the year if there was demand from customers.

Saudi Arabia is on track to boost capacity to 12.5 million barrels per day by the middle of next year, a Saudi oil official said on Tuesday. Current capacity is around 11.3 million bpd.

King Abdullah called an emergency meeting of consumers and producers last month in Jeddah to address high prices. At the meeting, the kingdom outlined plans to take capacity to 15 million bpd if needed in the future.

King Abdullah said that Saudi Arabia, like other producers and consumers, wanted to see stability in global oil markets.

Cooperation between producers and consumers needed to be strengthened, he said.

While the G8 summit in Japan called for dialogue between producing and consuming countries, Saudi Arabia had already created the Riyadh-based World Energy Forum to promote that dialogue, he added.

"We'd like the G8 to support existing initiatives instead of duplicating efforts with similar projects." (Reuters)

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