Saudi, Libya see oil eventually hitting $75/bbl

By Svetlana Kovalyova and Rania El Gamal

ROME (Reuters) - OPEC members Saudi Arabia and Libya are confident oil prices will keep rising to eventually hit $75 a barrel, but acknowledged it would not be any time soon as a weak world economy keeps a lid on demand.

Libya said oil demand could rise by the third quarter if the U.S. economy recovers, but top oil producer Saudi Arabia fretted about weak demand outside Asia as it urged OPEC to "stay the course" when it meets on May 28.

Libya's top oil official said the recent rise in prices appeared to be at least partly driven by speculation rather than fundamentals, a warning that came as the United States urged OPEC to avoid volatility that could slow an economic recovery.

"It is not the fundamentals that's moving the market because there is a lot of overhang in the market," Libya's Shokri Ghanem said on the eve of a meeting of the Group of Eight energy ministers. "The return of the speculators seems to me to be a force in the market."

He said oil prices would ultimately hit $75 per barrel -- the level producers say is needed to encourage investment in new production over the long term -- but not very soon.

Saudi Arabian Oil Minister Ali al-Naimi also said oil prices would "eventually" hit $75 per barrel but cited weak demand as a problem.

"The problem is the market. Demand is only in one place, in Asia, that's all," Naimi was quoted as saying by Platt's oil agency.

He urged OPEC to "stay the course" when it meets on May 28. The group is expected to stick to its current production targets, but stress the need for full compliance with them, a senior Gulf source has previously said.