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The world's biggest exporter says it can immediately lift output
(BBC) |
Saudi Arabia is ready to pump as many as 1.3
million extra barrels a day of oil to cool runaway
prices, the
country's oil minister has said.
Ali Naimi said the country had pumped 9.3 million b/d over the past
three months, but output would be raised to meet any extra demand.
US-traded oil hit 21-year highs of more than $45 a barrel on Tuesday,
amid concerns about supply disruption.
Oil prices fell briefly on the news, but still finished the day higher.
US light crude closed up 28 cents at $44.80 a barrel in New York trade,
while in London Brent crude rose 29 cents to settle at $41.57 a barrel.
Renewed bombing threats by an anti-US militia in Iraq and an
unexpectedly sharp fall in weekly US crude inventory figures helped push
prices higher.
Saudi Arabia has the world's largest proven oil reserves and is the
only country with significant spare output capacity.
"The Kingdom is well prepared to meet all the requirements of the
international oil companies if they need additional volumes," Mr Naimi
said in a statement.
He added that Saudi Arabia wants "to avoid any shortage of oil supplies
in the world oil market, provide enough oil supply as needed and prevent
any soaring prices that may impact the growth of global economies,
especially in developing countries".
The world's thirst for crude has been boosted by accelerating growth in
China and India, and a general recovery in the global economy and the US.
According to the International Energy Agency, the high oil price could
dampen that growth, especially in Europe and developing world.
The IEA estimates that an average price of $35 a barrel for this year
would take half a percentage point off global growth.
Earlier on Wednesday, the organisation lifted its estimate for world
oil demand, saying that it was running at 82.2 million barrels a day -
750,000 more than previously thought.
The upwards revision means that demand has grown by a 2.5 million
barrels a day this year.
What has worried the market - and pushed prices higher - is that there
is very little room for manoeuvre.
With producers already pumping flat out, there is hardly any slack left
in the system should a problem arise.
And there are a number of potential flash points.
In Russia, the biggest producer of oil outside of
the Opec oil cartel ,
a spat between the government and oil and gas company Yukos has raised
question marks over output.
In Iraq, which is second only to Saudi Arabia in terms of proven
reserves, continued fighting between US and coalition troops and militants
has disrupted output.
The upcoming presidential referendum in Venezuela is also seen as a
potential source of disruption for global supplies.
The country is the world's fifth-largest producer, and political
instability and anti-government strikes there prompted a jump in oil
prices in 2002.
(Agencies) | 
Updated: 2004-08-12 10:11