Wed Aug 11, 2004
By Heba Kandil

DUBAI (Reuters) - Top world oil exporter Saudi Arabia on Wednesday confirmed it had raised output sharply over the past three months in a bid to prevent high prices damaging world economic growth.

Saudi Oil Minister Ali al-Naimi said Riyadh had averaged 9.3 million barrels per day (bpd) of crude during that period in a bid to cool world prices and vowed to raise supplies to meet any extra demand.

"The kingdom of Saudi Arabia, in collaboration with the other OPEC countries, endeavors to ensure the stability of the international oil market and prevent prices from escalating in a way that may negatively effect the world economy or oil demand," the minister said in statement carried by the state press agency SPA.

He said Riyadh could immediately tap spare production capacity if needed.

"The kingdom is well prepared to meet all the requirements of the international oil companies if they need additional volumes, relying on its surplus production capacity of more than 1.3 million barrels daily, which could be used immediately if required," he said. A capacity crunch among members of the Organization of the Petroleum Exporting Countries is one of the main factors supporting world oil prices at record heights.

While there was little new in the Saudi statement, traders took note of Riyadh's concerns over the impact of high prices on economic growth and pushed U.S. crude futures down from Tuesday's $45.04 a barrel record.

The New York Mercantile Exchange contract by 1530 GMT was trading off 79 cents at $43.72 a barrel.

High prices appear to have made little impact yet on oil consumption which is rising at the fastest pace in 24 years.

Naimi said demand for Saudi crude in September would be "more than 9.3 million barrels daily and it will be met in full with no exclusions or reductions."

He said Riyadh's extra production over the past three months represented an increase of 1 million barrels daily.

In addition to the 9.3 million of crude, Saudi was also pumping 700,000 bpd of light condensates and gas liquid, Naimi added. Those extra volumes are not counted under OPEC quota restrictions.

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