April 19 (Bloomberg) -- The global economy can cope with rising crude prices, which may climb to as high as $120 a barrel in the coming week, Libya's top oil official said.

``For years we've been saying the era of cheap oil is over,'' Shokri Ghanem, chairman of Libya's National Oil Corp., said today in Rome before the International Energy Forum, which starts tomorrow. ``None of us thought it would reach $115 a barrel so quickly, so it could reach $120'' this week.

The world economy ``has not reached the tipping point where it can't accept higher prices,'' Ghanem said.

Crude oil futures have doubled in three years, touching a record $116.97 a barrel yesterday in New York. Member states of the Organization of Petroleum Exporting Countries have said there's enough supply in the market and price gains are the result of speculation and a weak dollar.

``OPEC is not pricing oil, it's the futures markets,'' Ghanem said. ``We think supply is adequate.''

Customers aren't asking for more crude, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said as he arrived in Rome today, blaming the plunging dollar for record prices. ``The oil price rises as the dollar gets weaker.''

The U.S. currency sank 8.3 percent against the euro to $1.5983, an all-time low, on April 17.

Oil as Hedge

Saudi Arabia Oil Minister Ali al-Naimi said the rising price of crude is ``absolutely'' unrelated to supply and demand fundamentals and is caused by investors using it as a hedge against falling currencies, according to a report in Argus.

Saudi Arabia, facing calls from oil-consuming nations to pump more crude, has no plans to raise output because increased supply wouldn't damp prices, Argus said, citing al-Naimi. The minister didn't comment as he arrived in Rome today.

Adding the country's spare supplies would ``destabilize'' the market by flooding it with oil that isn't needed, al-Naimi said, according to Argus. Pressure to raise output is ``probably politically driven.''

Saudi Arabia, the world's largest oil exporter and the only member of OPEC to have spare output capacity, can add more than 1.6 million barrels a day to production. The country pumped 9.2 million barrels a day in March, according to Bloomberg estimates. The other 12 members are close to capacity, Bloomberg data show.

Saudi Output Plans

The nation has no plans to raise output to more than 12.5 million barrels a day, which will be achieved by 2009, al-Naimi said. Projected oil consumption to 2020 doesn't require more crude from the country and estimates for demand are decreasing, he said. Saudi Arabia's King Abdullah said earlier this month that the nation's new oil discoveries must be saved for the benefit of future generations.

Bringing new oil capacity on-stream is becoming more expensive, at around $5,000 to $8,000 per barrel a day from $2,000 per barrel a day ``in the past,'' al-Naimi said, according to Argus. The depletion rate of Saudi fields is 2 percent to 3 percent at most, he said, Argus reported.

United Arab Emirates Oil Minister Mohamed Al-Hamli also said in Rome today that the oil market is ``adequately supplied.''

The International Energy Forum takes place every two years and is the largest gathering of energy ministers from oil- producing and consuming countries at a single event.

To contact the reporters on this story: Ayesha Daya in Rome at adaya1@bloomberg.net; Anthony DiPaola in Rome at adipaola@bloomberg.net

Last Updated: April 19, 2008 12:11 EDT