Saudi in landmark oil output hike

Saudi Arabia plans to raise oil output to 9.7 million barrels per day (bpd) in July to try and help tame record prices that have caused growing discontent among consumer nations, especially the United States.

Saudi Oil Minister Ali Al-Naimi told UN Secretary-General Ban Ki-Moon that the kingdom would hike output by 200,000 bpd next month, Ban told reporters on Sunday during a visit to Jeddah, UAE daily The National reported on its website.

"9.7, that is what he [Al-Naimi] said,” Ban was quoted as saying. “As far as the Saudis are concerned, they will respond positively whenever there is a request from their customers so there will be no shortage of petroleum... They don’t want to be blamed for a lack of production.”

The rise would take Saudi crude output to its highest monthly rate since August 1981, according to US government data.

Earlier in the day Al Arabiya Television said Saudi Arabia, the world's top oil exporter, had yet to make up its mind as to the size of the planned oil output increase, citing an official.

The figure of 9.7 million bpd is higher than 9.5 million bpd quoted by industry sources on Sunday, but below the 10 million bpd reported in the New York Times.

Ban described the article was “misleading”, The National said.

Ban also said Saudi's King Abdullah had vowed to do everything possible to tame oil prices, which hit a fresh record above $139 a barrel earlier this month, according to comments carried by the official Saudi Press Agency (SPA).

King Abdullah "sees that oil prices are currently abnormally high and he is willing to do all that is possible to bring prices to their appropriate levels", Ban was quoted as saying.

The hike in output by Saudi Arabia comes in the run-up to a high-profile meeting between oil producer and consumer nations on June 22 in Jeddah aimed at finding a solution to soaring prices.

Tensions over prices among consumer nations have threatened to boil over, sparking comments like that from Australian Prime Minister Kevin Rudd, who last week urged the G8 to apply a "blowtorch” to OPEC.