RIYADH (Reuters) - The world’s top oil exporter Saudi Arabia said on Friday it was ready to pump more oil if needed and has already made a modest output boost.
U.S. President George W. Bush met Saudi King Abdullah in Riyadh earlier on Friday to ask for more oil from OPEC to tame record oil prices.
The supplier of more than a tenth of the world’s oil raised supplies by 300,000 barrels per day (bpd) a week ago to compensate for a fall in supplies from other producers, Saudi Oil Minister Ali al-Naimi said at a press conference.
“On May 10, we raised supplies to customers by increasing 300,000 barrels per day of oil (output),” Naimi said. “Therefore, production in June will be 9.450 million bpd ... In the future if the need appears, Saudi Arabia has no objection to producing more.”
Naimi said most of the extra supplies would go to buyers in the United States, the world’s largest energy consumer.
But Naimi told Bush and other U.S. officials in a presentation on Friday that an increase in oil output would not lead to a dramatic reduction in U.S. pump prices, a U.S. official said.
U.S. oil was trading at $126 a barrel on Friday after hitting a record near $128.
The United States says more supply would help lower prices, while OPEC officials blame the high price on factors beyond their control, such as speculation and the weak dollar.
Naimi reiterated those views on Friday, blaming oil’s rise on international political tension, dollar weakness and the role of investors in the commodities market.
“Supply and demand are in balance today,” Naimi said. “If you look at inventories worldwide they are also high. So the fundamentals are sound.”
Bush has come under increasing domestic pressure to act as the price of oil weighs on the economy.
“We have not enough supply and too high demand,” White House spokeswoman Dana Perino said before the meeting. “Trying to get more supply out there is good for everyone.”
Saudi Arabia is spending $90 billion on boosting output capacity at home and abroad. Riyadh plans to boost crude oil production capacity to 12.5 million barrels per day (bpd) from about 11.3 million bpd.
Saudi Arabia holds most of the world’s spare oil capacity to meet any unexpected fall in supply. Naimi reiterated that the kingdom was committed to keeping spare capacity of 2 million bpd.
State oil giant Saudi Aramco has announced plans to go ahead with two new 400,000 bpd refineries this week, one with France’s Total and another with U.S. firm ConocoPhillips.
Oil demand is still growing in Asia, where subsidized prices cushion consumers from record oil. But consumption has begun to fall in the United States.
Reporting by Tabassum Zakaria and Matt Spetalnick; writing by Simon Webb; editing by Jim Marshall