Riyadh: World oil supply 'very adequate'

RIYADH - Saudi Oil Minister Ali Naimi said on Tuesday that the amount of crude available on the world market was "very adequate" and that the kingdom had spare capacity of 3.5 million barrels per day if needed.
"Current supplies in the market are very adequate, and there is an extra output capacity that could be used if needed," the state SPA news agency quoted him as saying.
"Recent crude prices do not reflect the fundamentals of supply and demand in the oil market as much as they are caused by financial speculation and a negative and unrealistic take on supplies," he said.
"Saudi Arabia has currently an extra output capacity of 3.5 million barrels per day which could be used and help in covering any shortage."
Naimi said the OPEC kingpin had "developed a special mix of crude oil that resembles the quality of supplies that are in shortage," in a clear allusion to Libya's output, which is a light, sweet crude that is highly prized by the market.
Clashes between rebels and troops loyal to embattled Libyan leader Moamar Gathafi have intensified, slashing production by the North African nation.
Libya is the fourth biggest oil exporter in Africa after Nigeria, Algeria and Angola, producing around 1.8 million barrels a day, with reserves of 42 billion barrels.
The bulk of its production is exported to Europe, according to the International Energy Agency.
Saudi Arabia last week said it was committed to the stability of the market and to ensuring that oil supplies remain available to offset the fall in Libyan exports.
Oil prices dipped slightly Tuesday on reports that members of the Organisation of Petroleum Exporting Countries have been holding consultations about the fallout from the Libyan turmoil.
New York's main contract, light sweet crude for delivery in April, dipped 20 cents to $105.44 a barrel, one day after soaring to $106.95 -- the highest level for two and a half years.
In London, Brent North Sea crude for April dropped 14 cents to $114.90.