Saudi Arabia, the world's largest oil producer, on Thursday signalled a dramatic shift in the oil market towards sustained higher prices by predicting prices would be between $40 and $50 a barrel for the rest of the year.

The comments by Ali Naimi, the Saudi oil minister, marked a break with tradition. It is the first time in recent history that Mr Naimi, the most influential minister in the Organisation of the Petroleum Exporting Countries, has disclosed the country's price forecast.