Saudi Arabia can increase oil production by 1.5 million barrels a day to help ease rising world crude prices, the kingdom's petroleum minister Ali al-Naimi said yesterday.
"We can increase supply by 1.5 million barrels a day. It depends on demand," Naimi told reporters in Manila, where he is on a three-day visit to meet government officials including President Gloria Arroyo.
The Saudi oil minister also dismissed market perceptions that oil supplies are limited: "There is plenty of supply. What we in Saudi Arabia want is to alleviate this unnecessary concern about shortage of supply."
Last Wednesday, OPEC raised production by 500,000 barrels per day (bpd), taking total output to 27.5 million barrels bpd.
It has also said it could raise production by a further 500,000 bpd if required by the market while total output could increase to 30 million bpd in the fourth quarter of this year.
But in an OPEC report released a day later, the 11-nation oil cartel warned that a shortage of refining capacity was also to blame for high oil prices.
It also forecast that world oil demand would grow by 1.9 million bpd this year, or an annual increase of 2.3 percent, "resulting in average global demand of close to 84 million bpd for the current year."
Saudi Arabia, the world's largest producer, previously warned that it could act alone to boost output if it failed to convince sceptical OPEC members to boost output against the background of record prices.
"I have said before that we in Saudi Arabia don't like high prices that negatively impact on economic growth particularly of developing nations," Naimi said in Manila.
He said Saudi Arabia would build its output capacity to 12.5 million barrels a day within four years starting from next year.
Crude futures stayed flat in Asia yesterday, hugging a record closing price from last week as traders speculated that rising global demand will not be met despite increased output assurances from oil cartel OPEC.
Light, sweet crude for April delivery fell US$0.13 in electronic trading to US$56.59 per barrel on the New York Mercantile Exchange mid afternoon in Asia. The benchmark commodity surged US$0.32 to close at US$56.72 per barrel on Friday.
"Most consultants believe that oil prices will stabilize between US$40 and US$50 [per barrel]. I'm not in the business of predicting oil prices," Naimi said.