MercoPress. South Atlantic News Agency

Saudi Arabia ready to pump 11 million bpd

Saudi Arabia announced Tuesday it was ready to increase crude production to eleven million bpd in case the consequences of the “Katrina” hurricane cause a shortage in the market, said Saudi Oil minister Ali al-Nuami.

"We're closely following the impact of "Katrina" in US oil supply, refining and market prices", indicated the minister quoted by the Saudi news agency Saudita SPA.

Mr. Ali al-Nuami added that "we're in permanent contact with our clients, particularly in the United States, to help them in case of a market shortage", although he underlined that US crude reserves currently are 40 million barrels above their level a year ago.

The minister recalled that Saudi Arabia continues with its plan to increase in the near future the country's production capacity to 12,5 million bpd.

"We're honouring our commitment of ensuring an adequate global supply of oil", he said.

Since the "Katrina" hurricane, one of the most devastating in recent times hit the Gulf of Mexico coastline in the United States, international oil prices broke through the 70 US dollars pb benchmark. The Gulf of Mexico area generates a quarter of the US oil and gas production.

Mr. Al-Nueimi also expressed concern with the continuing surge in oil prices and its potential impact on the world economy, particularly developing countries.

However he insisted that "international oil markets are in equilibrium and there's sufficient supply of crude".

Meantime Oil Petroleum Exporting Countries, (OPEC) secretary general Adnan Shihab-Eldin from Kuwait said that "economic fundamentals" don't help to explain the current record oil prices and insisted a "more rational" market should be operating with a 40 US dollars pb floor.

Speaking before an energy conference in Oslo, Norway, OPEC' top official insisted: "we want to assure markets that the level of crude reserves keeps increasing", adding that once "fundamentals recover the initiative, a 40 US dollars floor with prices in the range of 50/55 US dollar pb seems more rational".

Mr. Shihab Eldin said he supported OPEC's president Ahmad al.Fahd al-Sabah proposal to increase the cartel's daily production by another half a million barrels, which will be considered in September's OPEC meeting in an attempt to cool prices.

But he also warned about consumer countries responsibility arguing that if they don't take action and on time, "prices of oil, high and volatile?will probably be around for some time".