Saudi to raise oil output 2 per cent in July
Bloomberg Published: June 21, 2008, 14:06
Jeddah: Saudi Arabia, which convenes a meeting of government and business leaders on Sunday to discuss world energy markets, will raise its oil output by 2 per cent in July, the country's oil minister said.
The kingdom will add 200,000 barrels of oil to its daily production next month, taking its total to 9.7 million barrels a day, Ali Al Naimi told reporters in Jeddah, Saudi Arabia on Saturday. State-owned Saudi Aramco will soon add 500,000 barrels, or 4.6 percent, to the kingdom's total production capacity with its Khursaniyah field.
The International Energy Agency estimates that world oil use this year will climb 800,000 barrels a day, or 1 per cent, as demand increases in emerging markets. Stagnating production from Russia and the North Sea are also contributing to higher prices, which have touched off strikes, riots and accelerating inflation in nations around the world.
Oil doubled in the past year, touching a record $139.89 a barrel on June 16, as investors bought commodities to hedge against a weakening US dollar and concern mounted that demand is growing faster than supply. At least 24 airlines failed this year because of rising costs, while $4 gasoline in the US sparked concern the economy may slip into recession.
A Saudi proposal, to be discussed at the meeting in Jeddah on Sunday, will seek measures against market speculators, Prince Abdulaziz Bin Salman, the kingdom's deputy oil minister, said in an interview in the Saudi newspaper Asharq Al Awsat.
"The governments have a role to play in regulating and restructuring the markets so that the speculators are forbidden from actions that caused oil prices to reach the current level," bin Salman said.
"We want stable prices on the long term, not high and not low, so that oil demand can grow, Saudi Arabia can increase its production and preserves its revenue on the long run," the Saudi deputy oil minister said.
Saudi Arabia will present at the meeting a work document that outlines the reasons for the surge in oil prices, prepared in cooperation with the Organization of Petroleum Exporting Countries and the International Energy Agency, the Saudi official said. "It will be the only document that will be discussed."