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BUSINESS: Saudi Boosts Oil Output To Rein In Prices

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posted on Sep, 29 2004 @ 12:02 AM
In order to stabilize world oil prices, Saudi Arabia has announced plans to increase its production of oil from 9.5 to 11 million barrels a day. Saudi Arabia is one of the few oil producing countries that can ramp up extra production if needed. That being said it usually takes several weeks for that to impact the market. The time needed for the extra production was confirmed by a senior Saudi Oil Ministry official.
Saudi Arabia, the world's largest oil exporter, is to raise production from 9.5 million barrels a day to 11 million barrels in an attempt to rein in prices that have topped US$50 a barrel.

The increase will go into effect within weeks, according to a senior Oil Ministry official who spoke on condition of anonymity. No further details were provided.

OPEC had said producers are seeking ways to calm markets after the cartel's announcement that it would boost production by one million barrels a day beginning in November failed to bring down prices.

It wasn't immediately clear if all or some of that oil was included in the 1.5 million barrel increase the official described on Tuesday.

Saudi Oil Minister Ali Naimi said last month that his country was willing to provide an extra 1.3 million barrels of oil a day to the world market if required to do so.

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The marks has been unfazed by an announced effort by OPEC to increase production by 1 million barrels in November. It was unclear at this time if the increase Saudi production would be included in that amount. As posted here on ASTNN today, world oil prices pushed past the $50 dollar (US) level and look to stay there for some time. Supply remains tight as a variety of traditional producers from Nigeria to the Gulf coast have had to alter production due to internal strife or natural disasters. Economists are warning that increased energy prices could lead to a global recession.

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TOP STORY: Oil Hits $50 a Barrel


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