MADRID, July 25, 2008 (AFP) - The price of oil should stabilise at around 100 dollars per barrel, Venezuelan President Hugo Chavez said Friday during a visit to Spain.

'The price of oil needs to stabilise. The price according to our interpretation should be lower and stabilize at around 100 dollars per barrel,' the head of the OPEC member state told a joint news conference with Spanish Prime Minister Jose Luis Rodriguez Zapatero.

'No one, no one, no one thought that oil could come near 150 dollars a barrel in such a short time. It was unthinkable six months ago, now it should stabilize,' he added.

Chavez blamed the flow of speculative funds into the oil market for the surge in prices and encouraged Spain to invest in Venezuela's oil sector to help the Latin American country boost production and help bring down prices.

The rise in oil prices has fueled inflationary pressures and led to demonstrations around the world.

Oil prices were trading at around 127 dollars a barrel Friday at the end of a week of sharp falls.

Last year Chavez warned oil prices would jump to 200 dollars a barrel if the United states invaded Iran and earlier this month he warned that prices could reach 300 dollars a barrel if US oil giant Exxon again froze Venezuelan assets in a dispute over a nationalised oil project.