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Saudis willing to increase crude output

JIDDAH, Saudi Arabia — Facing strong U.S. pressure and global dismay over oil prices, Saudi Arabia said Sunday it will produce more crude this year if the market needs it. But the vague pledge fell far short of U.S. hopes for a specific increase and may do little to lower prices immediately.

Saudi Arabia — the world's top crude exporter — called the gathering to send a message that it, too, is concerned by high oil prices.

Instead, the meeting highlighted sharp disagreement between producers and consuming countries over the core factors driving steep price hikes. Oil closed near $135 a barrel Friday — almost double the price a year ago.

The United States and other nations argue that oil production has not kept up with increasing demand. But Saudi Arabia and other OPEC countries say there is no shortage of oil and blame financial speculation and the falling U.S. dollar.

Saudi Oil Minister Ali al-Naimi said the kingdom is willing to produce more than the 9.7-million barrels of oil a day it had already planned to produce in July — if the market requires it.

Saudi officials have said the country would provide enough oil to supply the market. The kingdom announced a 300,000 barrel per day production increase in May and said before the start of the Jiddah meeting it would add another 200,000 barrels per day in July, raising total daily output to 9.7-million barrels.

Both announcements had been factored into oil prices before Sunday's meeting — and neither did much to stem their rise. Total worldwide crude production is about 85-million barrels per day.

The increase is "going to help a little bit, maybe reduce prices just a little," New Mexico Gov. Bill Richardson, a Democrat and former President Bill Clinton's energy secretary, said on CNN. "It won't be significant."

At least one analyst thought the developments would spur prices higher. The market has been in a holding pattern to see if Saudi Arabia would take more aggressive steps, said Stephen Schork, an oil market analyst and trader in Villanova, Pa. The market is likely to view the announcement as a sign it will not, he said.

"We don't know anything more today that we didn't know Friday," Schork said.

Saudis willing to increase crude output 06/22/08 [Last modified: Monday, November 7, 2011 4:35pm]
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