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Saudi Arabia Plans Increase of Oil Production to Meet Demand

January 25, 2011 at 1:45 by Vladimir Vyun

Crude oil slumped today to the lowest level in five weeks after Ali al-Naimi, the Saudi Arabian Minister of Petroleum and Mineral Resources, promised that the Organization of the Petroleum Exporting Countries will increase output to meet the growing demand. Al-Naimi thinks that the global demand may rise by 1.8 million barrels per day (2 percent) this year. The International Energy Agency predicts somewhat lesser increase by 1.4 million barrels (1.6 percent) to 89.1 million a day.

Even with the increasing consumption al-Naimi feels sure that prices can be kept stable. He said that Saudi Arabia will have spare production capacity of about 4 million barrels per day. The analysts say that such comments suggest that Saudi Arabia isn’t interested in increasing the oil prices and will act to contain them at the current levels.

March delivery for crude oil fell $1.24 to $87.87 per barrel on NYMEX, the lowest settlement since December 16th. March settlement for Brent oil dropped as much as $0.99 (1 percent) to $96.61 per barrel on ICE.

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