* Saudi Arabia raises output above 9 million bpd
* Discreet Saudi increase because of OPEC sensitivities
* Libyan oil ports, terminals mostly halted-sources
(Adds consultant in paragraph 6)
By Barbara Lewis and Muriel Boselli
DUBAI/PARIS, Feb 25 Top exporter Saudi Arabia
has raised oil output above 9 million barrels per day (bpd) to
make up for a near halt in Libyan exports, an industry source
said, helping prices fall further from the highest since 2008.
Some European oil firms said they were looking to buy more
crude from Iran [ID:nLDE71O14K] and the West's energy watchdog,
the International Energy Agency, said on Friday there was no
need for an immediate strategic stock release. [ID:nLDE71O1H5]
The Saudi move follows reassurances from Riyadh earlier in
the week that it was prepared to act to prevent shortages as a
result of the rebellion in Libya against leader Muammar Gaddafi
that has sharply reduced the fellow OPEC producer's 1.3 million
bpd of exports.
"We have started producing over 9 million barrels per day.
We have a lot of production capacity," the industry source
familiar with Saudi production told Reuters.
Riyadh does not publish output figures. Reuters estimated
Saudi Arabia pumped 8.3 million bpd in January which would mean
the increase amounts to 700,000 bpd or 8 percent. [OPEC/O]
But one leading oil consultant who asked not to be named
said Saudi output was already at 8.9 million bpd in January
because it has been using increased amounts for domestic
consumption in recent months.
Saudi Arabia is the only country able to pump large amounts
of extra oil at short notice. It sometimes steps in unilaterally
to meet shortages or when it feels prices have risen to levels
that may threaten economic growth or oil demand.
The Organization of the Petroleum Exporting Countries has
resisted calls for a formal increase in output and says it does
not plan to meet until June.
Iran's deputy Oil Minister Ahmad Ghalebani told the
semi-official Mehr news agency he saw no need for an emergency
OPEC meeting. Iran holds OPEC's rotating presidency this year.
"There is no shortage of oil in the global crude market
stemming from political turmoil in Libya and other North African
countries that requires an increase of Iran's oil exports,"
Ghalebani told Mehr. [ID:nHAF541849]
Brent oil prices LCOc1 jumped close to $120 a barrel on
Thursday, the highest since August 2008, and traded at $111.48
on Friday -- still up from $94.75 at the end of last year.
News of Saudi Arabia's higher output came as disruption to
Libyan supplies worsened. Libya is the world's 12th largest oil
exporter and a source of high-quality crude oil, most of which
flows to Europe.
Libya's crude exports have almost halted because of reduced
production, a lack of staff at ports and security concerns,
industry sources told Reuters earlier on Friday. [ID:nLDE71O19F]
Other oil producers may also see increased demand as a
result of the Libyan crisis.
Italy's third-largest oil refiner, Saras (SRS.MI), is
looking to Russia, Iran and other Caspian countries to replace
crude oil shipments from Libya, an executive said on Friday.
The International Energy Agency, which represents consumer
countries, has said between 500,000 bpd and 750,000 bpd of
crude, less than 1 percent of global daily consumption, had been
removed "at present" from the market.
European oil companies have not taken up Saudi Arabia's
offer of more supplies yet, industry sources have said, with
some saying Saudi crude would not be a suitable substitute for
Libyan oil at their refineries.
In addition, they are not in need of extra supplies for now.
The IEA said on Friday European refiners threatened by a
shortfall had covered their needs well into March.
(Additional reporting by Emma Farge, Jonathan Saul and Alex
Lawler in London and Stephen Jewkes in Milan; editing by Keiron
Henderson and James Jukwey)