Saudi Arabia is working to bring down oil prices, a senior Gulf source said on Tuesday, adding the majority of OPEC producers wanted oil prices around $100 per barrel.
The Gulf source told reporters on the sidelines of an energy conference that the oil market was well balanced and there was no shortage of oil supply.
Saudi Arabia was pumping around 10 million barrels per day (bpd) of crude and members of the Organization of the Petroleum Exporting Countries and other producers would be increasing output over the next few months.
“We would like to see the price coming down and we are working to bring it down,” said the senior Gulf source, without giving further details. “The price now, we believe is high, and it's not supported by fundamentals at all. It’s just speculation and geopolitics.”
Oil prices have risen by around 30 percent over the last three months as investors have worried about security of supply from the Middle East and North Africa and on expectations that commodity prices would rise due to economic stimulus measures by the United States, Europe and China.
North Sea Brent crude oil is now around $114 per barrel, from below $90 in June, and prices are now well above the cost of oil production from most oilfields and at a level that some economists say could damage the world economy.
The Gulf source said there was no shortage in oil supply.
“We think the oil market is well balanced,” he said.
“The majority of OPEC countries prefer around $100, including Saudi Arabia,” he said, adding $100 per barrel was “right now the ideal price for the majority of OPEC countries ... the majority is all except one or two.”
“The expectation for the next two months and including next year is that there is more oil coming from non-OPEC ... North America, the Caspians, Iraq and others.”
World oil demand growth was slowing due to “difficulties in the global economy, especially in Europe and others. So the picture is a well-balanced oil market.”
Key OPEC oil producer Saudi Arabia would meet demand from its customers and keep pumping around recent levels:
“(Saudi output) is going to be around 10 million (bpd), depending on demand from customers, but we expect it to continue around 10. If there is more customer demand it will be met.”