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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (69116)	7/3/2000 4:04:09 PM
From: The Ox	Read Replies (2) \| Respond to of 95453

Monday July 3 3:25 PM ET Saudi Readies for Extra Oil Output LONDON (Reuters) - Key OPEC member Saudi Arabia said Monday it was preparing to raise oil production for the third time this year if crude prices do not fall from current lofty levels within the ``next few days.'' Saudi Oil Minister Ali al-Naimi told the official Saudi Press Agency (SPA) that his country, in consultation with other producers, would increase output by 500,000 barrels per day (bpd) if the price does not fall closer to OPEC's target of $25 a barrel. ``We have sought, and will continue in any way we can, to bring the prices down from their current level to the target levels of $25 per barrel of OPEC basket of crudes,'' Naimi told SPA. ``If the price does not decrease, Saudi Arabia, in conjunction with other producers will increase production by 500,000 bpd, within the next few days.'' Benchmark Brent crude Monday was valued at $31.25 a barrel. An OPEC source told Reuters that the kingdom was willing to increase output unilaterally if other producers could not. ``If the other producers are unable to increase production, Saudi Arabia is willing to do it alone,'' the source said. Riyadh's promise comes less than two weeks after the Organization of Petroleum Exporting Countries agreed for the second time this year to raise production. OPEC lifted output for 10 members by 708,000 barrels daily to 25.4 million bpd. Naimi said that Saudi Arabia, the world's largest petroleum exporter, had 2.3 million bpd of unused oil production capacity. He said there was more than one million bpd of excess capacity scattered among other producing countries. In his SPA interview, Naimi sought to quell market jitters over ``surplus production capacity limitations'' which he described as ``unwarranted,'' by restating that the kingdom had plenty of surplus oil. Oil traders said Riyadh would have to follow through with its promise, even if oil prices turn lower before it confirms the extra crude. ``(State oil company) Saudi Aramco will have to follow through on this, otherwise it will be a disaster,'' a senior oil executive said. Another Saudi customer agreed, adding, ``If we don't see the extra barrels, we could be heading for $40 oil.'' Traders with companies buying Saudi oil said they were gearing up for extra barrels. Analysts said Saudi Arabia appeared to have listened to demands by the United States, the world's largest oil consumer, for more oil to take the heat out of the prolonged oil price rally. Naimi said tightness in the United States heating oil and gasoline markets was helping to push crude oil prices beyond $30 a barrel. Relatively lean inventories of crude and products were also keeping prices firm, the oil minister said.