"Saudi willing to increase oil production"

Facing strong U.S. pressure and global dismay over oil prices, Saudi Arabia said Sunday it will produce more crude this year if the market needs it. But the vague pledge fell far short of U.S. hopes and prompted at least one industry analyst to predict prices will simply go higher.

``$150 (a barrel) here we come,'' said Stephen Schork, an oil market analyst and trader in Villanova, Pa. The market, in a holding pattern waiting to see if Saudi Arabia would take more aggressive steps, was likely to view Sunday's announcement as a sign it will not, Schork said.

``We don't know anything more today that we didn't know Friday,'' Schork said. ``There's nothing new at all added to the mix.''
Oil closed near US $135 a barrel on Friday _ almost double the price of a year ago.
For now, the ``oil shock'' leaves Western countries with little choice but to move toward nuclear power and change their energy-consumption habits, Britain's prime minister warned at the rare meeting of oil-producing and consuming nations.

Saudi Arabia the world's top crude exporter had hastily called the gathering to send a message that it, too, is concerned by high oil prices inflicting economic pain on people worldwide.

Instead, the meeting highlighted the sharp disagreement betweens producers like Saudi Arabia and consuming countries like Britain and the United States over the core factors driving the steep price hikes.

The cost of gasoline also has become a sore point in the U.S. presidential race, with President George W. Bush and presumed Republican nominee John McCain calling on Congress to lift its long-standing ban on offshore U.S. oil and gas drilling. Barack Obama, the presumptive Democratic nominee, has said such moves will do nothing to ease American consumers' pain short-term.

The U.S. and other nations argue that oil production has not kept up with increasing demand, especially from China, India and the Middle East. But Saudi Arabia and other OPEC countries say there is no shortage of oil and instead blame financial speculation and the falling U.S. dollar.

Saudi Oil Minister Ali al-Naimi said the kingdom is willing to produce more than the 9.7 million barrels of oil a day it had already planned to produce in July _ if the market requires it.

But the Saudi oil minister gave no specific figures. And he blamed speculators for most of the rise, and asserted supply is not the problem.
News by:AP