Saudi Arabia will produce more oil, markets react cautiously
Jeddah (AsiaNews/Agencies) - Markets are reacting cautiously to today's announcement from Saudi Arabia, which will begin producing more petroleum in July, in order to contain prices and respond to the requests from the United States and other developed countries. Early trading in Europe has seen only a small reduction in the price of oil, after this fell by 2 dollars a barrel on July 13 following unofficial news of the production increase.
Saudi oil minister Ali al-Naimi and UN secretary Ban Ki-moon announced the increase. The word is that there will be an extra 200,000 barrels a day, in addition to the 9.45 million produced now. In May, production was raised by 300,000 barrels. The actual number could be revealed on June 22, after the meeting scheduled in Jeddah (Saudi Arabia) with the cartel of oil producing countries (OPEC).
After meeting with king Abdullah, Ban Ki-moon said that the king also believes that the current price of oil is "abnormally high due to speculative factors and some other national government policies. He is willing to what he can to [bring] the price of oil to adequate levels".
The announcement comes as the financial ministers of the eight most industrialised countries (G8), meeting in Japan, announced that the high prices of oil and food constitute "a serious challenge to stable growth worldwide", and could push inflation and poverty higher.
The Saudi decision could create division among OPEC members, many of whom do not want or are not able to increase production, and want to keep prices high. The country is completing the development of the gigantic Khursaniyah field, which could bring 500,000 barrels a day on line.
In spite of the prices, demand for petroleum is increasing, reaching 86.88 million barrels a day on June 13, an increase of 1.1 million since the beginning of 2008.
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