Saudi plans do not reflect OPEC position-official

www.forbes.com Reuters, 01.23.03, 5:12 AM ET

LONDON, Jan 23 (Reuters) - Saudi Arabia's willingness to raise oil output again early next month does not reflect OPEC policy, an OPEC official said on Thursday.

Saudi ambassador to the United States Prince Bandar bin Sultan said on Wednesday that Riyadh was willing to raise production again if oil prices do not ease soon.

The OPEC official at the group's headquarters in Vienna said: "This does not reflect OPEC's position. We have just raised output effective from February 1."

OPEC, of which Saudi Arabia is the biggest producing member, two weeks ago agreed to raise output by 1.5 million barrels a day (bpd) to contain oil price rises driven by a strike in Venezuela and fears of war in Iraq.

"Our government is ready to do more in the next two or three weeks if we see the price is not stabilizing and going down below $28," Bandar told a meeting of the U.S. Conference of Mayors in Washington.

Riyadh is worried that high oil prices will slow the economies of industrialized countries, reducing their purchases of oil.

"When our American friends catch cold, we catch pneumonia in our part of the world, so to help your economy is paramount to us," he said.

OPEC seeks to keep the price for a basket of its crude in a range between $22 to $28 per barrel. Prices have been above the top end of the range since December 16.

With most in OPEC already pumping at full capacity, only Saudi Arabia and the UAE would be capable of adding supply.

Saudi Arabia's new OPEC quota from February was set at 7.963 million bpd, but the kingdom is expected to be pumping between 8.5-9.0 million bpd in the next few weeks, industry sources said earlier this week.

Saudi Oil Minister Ali al-Naimi has made clear that Riyadh is capable if necessary of ramping up flows to 10 million bpd within weeks.