Saudi Arabia's oil minister on Tuesday denied the surge in oil prices reflects a shortage of crude on the market but said the kingdom is committed to tapping excess supplies if needed.
The 12-nation Organization of the Petroleum Exporting Countries has so far held its official output quotas unchanged, even as massive protests across the oil-rich Middle East have pushed global oil prices to their highest levels since late 2008. An uprising in OPEC member Libya has stoked supply concerns, increasing pressure on the producer bloc to pump more to ease prices.
The oil minister of OPEC kingpin Saudi Arabia, Ali Naimi, said the oil market remains well-supplied. In an interview with the Saudi state news agency, he reiterated the kingdom's stance that the spike in oil costs stems more from financial speculation and unwarranted investor sentiment than industry fundamentals.
"The Kingdom of Saudi Arabia has long been committed to promoting market stability in the interest of both producers and consumers, and in support of global economic growth and development," Naimi told the Saudi Press Agency.
At the same time, he signaled the kingdom is prepared to act if needed, saying it has 3.5 million barrels a day of spare capacity that could be brought online.
"Time after time we have delivered on that commitment by tapping our additional crude oil production capacity when supply conditions warranted, and Saudi Arabia will continue to reliably meet the world's petroleum needs," he added.
Earlier in the day, Naimi's counterpart in Kuwait told reporters that some OPEC member states, which together produce about 35 percent of the world's oil, had begun informal talks about how to address the price increase.
Kuwaiti oil minister Sheik Ahmed al-Abdullah al-Sabah said OPEC members haven't decided whether the surge warrants an emergency meeting to adjust the group's output quotas.
"We are in consultation, but we have not decided which direction," he said, without providing details of the talks or where they might lead.
Kuwait for now is sticking to its previously agreed quota levels. "We didn't increase," al-Sabah said.
Oil prices hovered near $104 a barrel Tuesday, down from the nearly $107 a barrel struck the previous day, crude's highest level since Sept. 26, 2008. The rapid rise is translating into higher fuel prices.
OPEC is not scheduled to meet again formally until June 8 in Vienna.
Several members of the group routinely produce more than their allotment. The temptation to cheat and pump more rises along with prices.
Iran, OPEC's No. 2 producer, currently holds OPEC's rotating presidency. Its support would likely be crucial in pulling together an emergency meeting but that could be hard to come by, said U.K.-based industry analyst John Hall.
"Iran probably couldn't increase output even if it wanted to," so it is content to let prices remain high, Hall said.
Oil inventories in developed nations remain high. But traders are concerned that the unrest that has ravaged Libya will spread to other major producers, particularly Saudi Arabia, which has witnessed only a handful of small protests so far. Pro-reform protesters are calling for wider demonstrations in Saudi Arabia this week.
Naimi's comments echo those made by smaller producer Qatar on Monday. Its energy minister, Mohammed bin Saleh al-Sada, denied there was a supply shortage and said "stocks are at a healthy level for the consumer." He added that OPEC is closely monitoring the situation and stands ready to act.
"From what we know, a number of countries are happy to check the market if there is any shortage," he said.
Libya sits atop Africa's largest proven reserves of conventional crude, and produces about 1.5 million barrels per day. But the fighting between anti-government rebels and forces loyal to leader Moammar Gadhafi has battered production, lowering output by more than half, according to many estimates.
Saudi Arabia has been increasing its output to offset the Libya export slump.
In oil-rich Nigeria, a spokesman for the state-run Nigerian National Petroleum Corp. said Africa's top crude oil producer would be ready to offer additional barrels if OPEC asks.
"We will do whatever they demand of us to do as a member," Levi Ajuonoma told The Associated Press on Tuesday, cautioning that nobody has contacted them.
It remains unclear what additional production Nigeria can muster at the moment. Royal Dutch Shell PLC recently closed its major Bonga deep-water oil field for maintnenace, which has a capacity to produce more than 200,000 barrels of crude oil a day. But militancy in the country's crude-producing Niger Delta has dropped in recent months, allowing for production to creep back up in the uneasy region where attacks cut into supply.
Associated Press writer Jon Gambrell contributed to this report from Lagos, Nigeria.