MercoPress. South Atlantic News Agency

Saudis reject oil production increase request from Bush

Saudi Arabia rejected on Friday an appeal by visiting US President George W Bush to raise oil production reported a US official. Saudi officials said they were already meeting demand, and had increased production by 300,000 barrels per day earlier this month.

The news came after talks in Riyadh between Mr Bush and King Abdullah. The US wants an increase in production to help curb record prices, currently 127 US dollars a barrel, but Saudi officials blame speculation not supply shortages. "Supply and demand are in balance today... The fundamentals are sound," said Saudi Oil Minister Ali al-Nuaimi. "How much more can we do?" US National Security Adviser Stephen Hadley said the Saudi government had indicated it would put as much oil on the market as necessary to meet demand. "What the Saudis wanted to tell us was we're doing everything we can do... to meet this problem, but it's a complicated problem," he said. He added that the Saudi authorities thought it was unlikely that boosting production would reduce the price. Hadley said the White House had accepted Riyadh's response but would check the situation with its own experts. Mr Bush's visit to Saudi Arabia follows a trip to Israel to coincide with the 60th anniversary of the country's foundation. The announcement came when oil prices ended the week hitting a record high approaching 128 US dollars a barrel on speculation that China will need to import more fuel, stretching supplies. With more energy needed to rebuild areas devastated by the earthquake this week, US light sweet crude hit U$D 127.82 a barrel before falling to U$D 126.29. Prices were also supported by Goldman Sachs forecasting that oil would reach U$D 141 a barrel later this year. London Brent crude also rose, touching U$D 125.82 a barrel before also slipping. "Tight supply conditions continue to be the primary catalyst for higher crude prices," Goldman Sachs analysts said. Earlier this month, Goldman Sachs predicted that oil could reach U$D 200 a barrel in the not too distant future. Prices have risen by about 25% since the beginning of the year, lifted by geopolitical worries and the weakening US dollar, which makes oil cheaper for foreign buyers.