Saudi pumping extra oil to meet demand: Saudi source

ABS-CBN News

Posted at Jun 22 2008 07:34 AM | Updated as of Jun 22 2008 03:34 PM

Reuters

JEDDAH, Saudi Arabia - Top world oil exporter Saudi Arabia has decided to increase oil supply to meet demand from customers, a Saudi oil source said on Saturday.

Saudi Arabia will raise output to 9.7 million barrels per day in July, the fastest daily rate in decades.

"We increased because they (our customers) asked for it," the source said.

He was speaking as delegates from oil consuming and producing countries arrived in Jeddah for a meeting on Sunday to try tackle record oil prices.

There was no consensus yet between consumers and producers on the causes of high oil prices, he said, but he believed there was a collective will to try to stem the record rally.

"I really believe strongly that there is a political will of oil producers and consumers to lower the price and stabilize it, otherwise they would not have come," he said.

Oil markets were well-balanced but the price of oil was unjustifiably high, the source said.

"Right now the majority of people think the price of oil is very high," he said. "There is no justification for this price."

The kingdom currently has spare output capacity of around 2 million barrels per day, he said.

Saudi Arabia has a long-held policy of keeping a cushion to deal with any surprise global supply disruptions of between 1.5 million and 2 million bpd.