Saudi Arabia increases oil output to more than 9 mbpd
Baku, February 25 (AZERTAC). Saudi Arabia has quietly increased its production to more than 9 million barrels per day (bpd), an increase of more than 700,000 barrels a day, a senior industry source familiar with Saudi production told Reuters on Friday. "We have started producing over 9 million barrels per day. We have a lot of production capacity," the source said. Reuters estimated Saudi output at 8.3 million bpd in January. OPEC`s leading producer has come under pressure to lift output to stem a spike in oil prices now at $112 a barrel
After a surge in Brent oil prices to 2-1/2 year highs near $120 a barrel, South Korea, the world`s fifth-biggest crude importer, warned that its inflation situation was getting tougher.
The key risk for the world economy is a sustained rise in the price of oil. But after shooting up to close to $120 a barrel in intraday trade on Thursday, Brent crude futures ended the day at less than $112, showing just how fraught investors nerves are.
The sharp fall came after market rumours that Libyan leader Muammar Gaddafi had been shot dead and on news that top producer Saudi Arabia could cover any supply disruptions.
On Friday, Brent crude was trading around $112. U.S. crude futures eased to $97.60 from a Thursday high of $103.41.
In Libya, forces loyal to Gaddafi hit back in fierce gun battles with rebels holding towns near the capital but there were no signs they had broken the opposition momentum.
The Organization of the Petroleum Exporting Countries (OPEC) has an estimated 4-6 million barrels per day of spare crude production capacity, more than enough on paper to cover Libya`s output of 1.6 million barrels a day.
Saudi Arabia this week unveiled a $37 billion package to try to insulate the kingdom from the wave of protests across the Arab world, while Algeria lifted a 19-year-old state of emergency as it tried to appease opposition groups.
Deutsche Bank said oil above $120 a barrel would be an inflection point for global economic growth. At that price, oil as a share of global GDP starts to move above 5.5 percent, historically a point where global growth has come under pressure.
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