Saudi Arabia raises oil output

DUBAI.
SAUDI Arabia has increased its oil production to more than nine million barrels per day (bpd) to compensate for disruption to Libyan output, an industry source familiar with the kingdom’s production said last Friday.
“We have started producing over nine million barrels per day (bpd). We have a lot of production capacity,” the source said, but said he could not say when the change had taken place.
Oil prices spiked to a 2-1/2 year peak of nearly US$120 a barrel on Thursday, stoked by concern the wave of revolutionary unrest gripping world No.12 oil exporter Libya could spread to big oil-producing countries in the Middle East.
A report out of Washington by industry publication Energy Intelligence last week said Saudi Arabia had made the change quietly to try to avoid stoking regional tensions.
“The Saudi move has not been announced publicly, most likely because of the political sensitivities in the region and the internal dynamics of Opec,” Energy Intelligence wrote.
However, Saudi Arabia, which has around four million bpd of spare capacity, has publicly stated it will provide customers with all the oil they need to compensate for supply disruption from Libya. A popular revolt has thrown the North African country into chaos, but estimates of how much oil production has been disrupted vary.
The International Energy Agency, which represents consumer countries, has said between 500 000 bpd and 750 000 bpd of crude, less than 1 percent of global daily consumption, had been removed “at present” from the market. Even before the latest price surge, oil prices had been climbing steady, prompting members of the Organisation of the Petroleum Exporting Countries to increase production above agreed output targets. – Reuters.
Saudi Arabia’s output had already hit a two-year high of nearly 8.4 million bpd in December, although it was only exporting just over 6 million bpd. -Reuters