Azerbaijan, Baku, Feb. 25 / Trend /
The world can weather a spike in oil prices, U.S. President Barack Obama said, as Saudi Arabia offered some respite to fears over Middle East oil supplies by indicating it can cover export cuts resulting from Libya's civil war, Reuters reported.
"We actually think that we'll be able to ride out the Libya situation and it will stabilize," Obama, referring to fuel prices, told a group of corporate chief executives.
His Treasury Secretary said the world had plenty of oil reserves.
"We have substantial capacity across the major economies in the strategic reserves," Timothy Geithner said.
"Hopefully, by reminding people of that and calling attention to the fact that there's a fair amount of excess capacity in parts of OPEC ... hopefully that will make it less likely the market ... starts to build in higher prices over time."
The key risk for the world economy is a sustained rise in the price of oil. But after shooting up to close to $120 a barrel in intraday trade on Thursday, Brent crude futures ended the day at less than $112, showing just how fraught investors nerves are.
The sharp fall came after market rumors that Libyan leader Muammar Gaddafi had been shot dead and on news that top producer Saudi Arabia could cover any supply disruptions.
On Friday, Brent crude was trading around $112. U.S. crude futures eased to $97.60 from a Thursday high of $103.41.
The Organization of the Petroleum Exporting Countries (OPEC) has an estimated 4-6 million barrels per day of spare crude production capacity, more than enough on paper to cover Libya's output of 1.6 million barrels a day.
But markets are worried that the unrest might spread to bigger producers in the region that would have a much bigger impact on the world economy.