Report: Saudis tell oil investors that low prices might stay

Saudi Arabian officials are privately telling oil investors and analysts that the country might accept an extended period of low oil prices.

Oil prices have been below $100 in recent weeks, pushing some members of the Organization of Petroleum Exporting Countries to ask for production cuts to raise prices.

{mosads}But in recent meetings, Saudi officials have indicated that they are comfortable with $90-per-barrel prices for a year or two, or even as low as $80, Reuters reported.

Low prices in the short term could lead to longer prices in the medium term, since it could curb production from shale in the United States or ultra-deepwater wells that are no longer profitable at lower oil prices, according to Reuters.

Venezuela started asking last week for production cuts as an attempt to raise prices.

But Saudi Arabia and its allies have said that there isn’t likely to be much benefit to reducing output, Reuters said.

A source familiar with the Saudi conversations with market participants told Reuters that the kingdom does not want anyone to be surprised with sustained prices below $90 a barrel. One source told the news service that the country might accept prices as low as $80.