|S. Arabia plans to increase oil output
Sat, 14 Jun 2008 08:21:37
Saudi Arabia plans to increase its oil production to nearly 10 million barrels a day (bpd) from the current level of 9.45 million bpd.
The Middle East Economic Survey reported on Friday that Saudi Arabia, the world’s biggest oil exporter, plans to increase its output to its highest level ever ahead of a June 22 meeting of oil producers and consumers in Jeddah.
The price of US crude oil fell by $2.36 to $134.38 a barrel at 15:15 GMT Friday on the report of Saudi plans to raise output. Brent crude, whose July contract expires on Friday, was down by $2.31 at $133.78 a barrel.
The recent volatility in rising oil prices apparently persuaded the Saudi government to consider raising its output.
In his recent visit to Saudi Arabia, President Bush urged the Saudis to step up production. By mid May, the Kingdom raised its production by 300,000 bpd but argued the oil market was well supplied.
Oil, which hit a record high of $139.12 on June 6, has repeatedly tested new peaks on fears of tight supplies.
But a rally on oil prices by nearly 40 per cent so far this year has also prompted fears that high prices may be starting to affect demand.
Saudi Oil Minister Ali al-Naimi, while speaking to the Saudi state news agency SPA, reiterated that market fundamentals did not justify current high oil prices and that the Jeddah meeting will seek to curb energy prices, which have hurt the world economy especially in developing countries.