Saudi uneasy with high oil price, worried about economy

Wednesday, 27 April 2011 00:03 -     - {{hitsCtrl.values.hits}}

(Reuters) - Top oil exporter Saudi Arabia is uneasy with high oil prices and concerned about their impact on the global economy, the chief executive of state oil firm Aramco said on Tuesday.

Oil prices fell on Tuesday in part after the remarks from Aramco's Khalid al-Falih. Brent crude fell 57 cents to $123.09 a barrel by 0153 GMT, just four dollars below a 2-1/2-year peak hit earlier in April at $127.02.

"We are not comfortable with oil prices where they are today...I am concerned about the impact it could have on the global economy," Falih told an industry gathering in South Korea.

There was no tightness in global oil markets, Falih said. His comments echoed those of Saudi Oil Minister Ali al-Naimi, who said last week that the kingdom had cut oil output in March as the market was oversupplied.

Unrest and violence in North Africa and the Middle East and strong demand growth in Asia have pushed prices to their highest levels since 2008, triggering a series of warnings from consumers and producers that costly oil would harm economic growth, in turn eroding fuel demand.

Saudi Arabia and other OPEC producers warned last week of the strain of high energy prices on economies still fragile after the global financial crisis in 2008.

Saudi Arabia had enough capacity to meet any spike in demand and plug short-term outages in supply, Falih said.