Jan. 9 (Bloomberg) -- Saudi Arabia, the world’s biggest oil producer, could raise its oil production capacity to 15 million barrels a day, a former Saudi Aramco official said. That would be almost one-third above the current level.

“The resources are there, the organizational capability is there,” Nansen Saleri, president and chief executive officer of Houston-based Quantum Reservoir Impact and former head of reservoir management at Saudi Arabian Oil Co., said in an interview today in New York.

Saudi Arabia, which has the capacity to supply 10.8 million barrels of oil a day to the world market, produced 8.4 million in December, according to data compiled by Bloomberg.

The Organization of Petroleum Exporting Countries, of which Saudi Arabia is the biggest member, agreed on Dec. 17 to curb supply by 9 percent starting Jan. 1 as declining demand led to a collapse in prices.

“Before you increase your capacity, you want to make sure demand is there,” Saleri said.

Oil prices have fallen 72 percent from their July 11 record of $147.27 a barrel. The price for February delivery fell 87 cents to $40.83 a barrel on the New York Mercantile Exchange today after a government report showed that the U.S. unemployment rate surged in December, raising concern demand will drop faster than OPEC cuts.

Oil’s rise in the year was affected “significantly by external factors, especially speculative factors,” Saleri said.

“Right now, I can say the same thing,” he said. “What you are seeing right now does not reflect the true fundamentals of supply and demand. Yes, oil is going to be moving up and down but its hard to make an argument that its going to stay in those low levels.”

To contact the reporter on this story: Robert Tuttle in New York at rtuttle@bloomberg.net

Last Updated: January 9, 2009 18:13 EST