Saudis to further boost oil output

Saudi Arabia plans to increase its oil production by 200,000 barrels a day next month to help tame high fuel prices, U.N. Secretary-General Ban Ki-moon said Sunday.

The planned output of 9.7 million barrels per day would be an increase of more than 6% since May and would take Saudi crude output to its highest monthly rate since August 1981, according to U.S. Energy Information Administration data.

Saudi King Abdullah “believes that the current oil prices are abnormally high, and he is ready to restore prices to their appropriate levels,” the state-run Saudi Press Agency quoted Ban as telling reporters in Jidda after he met with the king and Oil Minister Ali Naimi.

Saudi Arabia is concerned that sustained high prices will eventually slacken the world’s appetite for oil, affecting the kingdom in the long run.

The Saudi output plan comes to light a week before the kingdom holds an unprecedented meeting of producers and consumers to tackle market instability.

The relentless rise in oil prices to well above $130 a barrel has sparked fuel protests from Asia to Europe and roiled financial markets as policymakers fear higher inflation will slow the global economy.

The market might see the Saudi plan as marginal. The earlier 300,000-barrel-a-day output increase had little effect.

In electronic trading on the New York Mercantile Exchange late Sunday, crude oil futures were down 54 cents at $134.32 a barrel.