Saudi Arabia to Bring Oil Prices Down

V I E N N A, Austria, July 4 -- — Saudi Arabia appears to be gathering allies in its move to quickly put even more oil into the market after an agreed increase in OPEC quotas failed to bring the price of oil down from nearly $30 a barrel.

Saudi sources were quoted as saying that the country, the only OPEC member with the capacity to pump significant quantities of extra oil so quickly, was considering putting an extra 500,000 barrels of oil a day, or bpd, on the market “immediately.”

Saudi Oil Minister Ali al-Naimi told the official SaudiPress Agency (SPA) his country, in consultation with otherproducers, would increase output if prices don’t fall from more than $30 now to OPEC’s target of $25 a barrel.

“We have sought, and will continue in any way we can, tobring the prices down from their current level to the targetlevels of $25 per barrel of OPEC basket of crudes,” Naimi toldSPA.

“If the price does not decrease, Saudi Arabia, inconjunction with other producers, will increase production by500,000 bpd, within the next few days.”

Unilateral Action?

It was not clear if this oil would come from Saudi Arabia alone or from a consortium of OPEC and non-OPEC countries.

Earlier, an OPEC source told Reuters that the kingdom was willing to unilaterally increase output if other producers could not.

“If the other producers are unable to increase production,Saudi Arabia is willing to do it alone,” the source said.

And OPEC President Ali Rodriguez of Venezuela said he knew nothing about Saudi Arabia’s decision, even as an official from OPEC member Qatar said the Saudis were acting alone.

But today Iranian Oil Minister Bijan Zanganeh told Reuters and Iranian television that Naimi had promised him Saudi Arabia would continue to work inside OPEC.

“Mr. Naimi assured me in a telephone conversation he hadwith me today that Saudi Arabia will continue to act within OPECframeworks and will not move outside them,” Zanganeh told reporters.