The US and Saudi Arabian leaders also expressed concern about Iran
Saudi Arabia has rejected an appeal by US President George W Bush to raise oil production, a US official has said.
Saudi officials said they were already meeting demand, and had increased production by 300,000 barrels per day earlier this month.
The news came after talks in Riyadh between Mr Bush and King Abdullah.
The US wants an increase in production to help curb record prices, currently $127 a barrel, but Saudi officials blame speculation not supply shortages.
"Supply and demand are in balance today... The fundamentals are sound," said Saudi Oil Minister Ali al-Nuaimi.
"How much more can we do?"
US National Security Adviser Stephen Hadley said the Saudi government had indicated it would put as much oil on the market as necessary to meet demand.
"What the Saudis wanted to tell us was we're doing everything we can do... to meet this problem, but it's a complicated problem," he said.
He added that the Saudi authorities thought it was unlikely that boosting production would reduce the price.
Mr Hadley said the White House had accepted Riyadh's response but would check the situation with its own experts.
Mr Bush and King Abdullah also discussed the recent violence in Lebanon, and expressed concern that the show of strength by Hezbollah would "embolden Iran", Mr Hadley said.
Mr Bush's visit to Saudi Arabia follows a trip to Israel to coincide with the 60th anniversary of the country's foundation.