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Saudi’s to produce more Oil, prices fall

June 15th, 2008 • Related • Filed Under

United Nations chief Ban-ki-moon said world’s biggest producer of oil, Saudi Arabia, is to increase its oil production by more than half a million barrels per day (bpd) to 9.7 bpd in July. The news was reported in Abu-Dhabi based National Newspaper after Ban-ki-moon met Saudi oil minister Ali al-Naimi.

Following the news of higher production, crude oil prices fell by more than half a percent to $134 per barrel. Oil had fallen nearly $2 a barrel on Friday after industry newsletter the Middle East Economic Survey reported Riyadh was considering a size-able output increase to near 10 million bpd.

Saudi Arabia had pledged a month ago to increase supply by 300,000 bpd this month versus May to meet demand from buyers, primarily in the United States.

But prices are still double what they were a year ago and have surged six-fold since 2002, and financial leaders fear the rally could worsen the U.S. economic downturn.