Top oil exporter Saudi Arabia is unhappy 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, 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.
High prices were not due to any tightness in supply in global 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 of the strain of high energy prices on fragile economies emerging from recession or slowdown in the wake of the 2008 financial crisis.
Saudi Arabia had enough capacity to meet demand and moderate high prices if necessary, Falih said. "...the Kingdom will continue to act in support of oil market stability and as a force for moderation," he added.
Saudi Arabia boosted supply in February to above 9 million bpd to plug the gap left by Libya, where civil war cut exports. The kingdom is the only oil producer with significant spare capacity to meet large supply outages such as that experienced in Libya.
The kingdom has 12.5 million bpd capacity and pumped 8.292 million bpd in March, giving it a cushion of around 4 million bpd.
Two out of every three barrels that Saudi Aramco exports go to Asia, Falih said. The state oil giant is considering joint-venture refining projects in Vietnam and Indonesia in addition to China as part of its plans to boost refining capacity.
Aramco's daily refining capacity would "soon" grow 50 percent from its current level to more than 6 million barrels per day, he said.
Aramco is building two refineries in Saudi Arabia and four more are being considered in Jizan in the kingdom and projects in China, Vietnam and Indonesia, Falih said. Aramco would also expand and upgrade existing refining centers, he added.
"Companies from Korea and other Asian nations are important suppliers of top quality goods, materials and services to our operations and we are seeing increasing volumes of foreign direct investment from Asia in the kingdom."
Saudi Aramco's natural gas production capacity would grow within five years to 14 billion standard cubic feet per day (cfd), he said.
Saudi Arabia would spend more than $450 billion on capital projects over the next five years, while Aramco would be spending a total capital budget of roughly $125 billion on domestic and international projects over the same period.
This spending includes new crude increments, refining and petrochemical facilities, he said.
Saudi Aramco is a major shareholder of South Korea's third-largest crude oil refiner S-Oil with a 35 percent stake in the 650,000-bpd refiner. Aramco will hold a board meeting in South Korea on Thursday.
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