(Updates with oil analyst’s comment in third paragraph.)
June 10 (Bloomberg) -- Saudi Arabia will increase oil production, though it is too early to say by how much, according to a Saudi industry official with knowledge of the matter.
The country, the world’s biggest crude producer, is still assessing demand, the person said, declining to be identified because he isn’t authorized to speak for the government. Al- Hayat newspaper said earlier today that Saudi Arabia will boost output to 10 million barrels a day in July from 8.8 million now. It cited senior OPEC and industry officials.
“They are headed to 10 million barrels per day this month and through next month,” Bill Farren-Price, chief executive officer at Petroleum Policy Intelligence, a Winchester, England- based researcher, said today by telephone.
The 12 members of the Organization of Petroleum Exporting Countries failed two days ago in Vienna to agree on production levels in what Saudi Oil Minister Ali al-Naimi said was “one of the worst meetings” he had attended. Saudi Arabia, Kuwait, Qatar and the United Arab Emirates proposed a 1.5 million barrel-a-day increase in output targets. Libya, Angola, Ecuador, Algeria, Iran and Venezuela opposed the move, al-Naimi said.
Crude fell as much 3.1 percent to $98.79 a barrel on the New York Mercantile Exchange today following the Al-Hayat report. It rose to more than $100 a barrel after the collapse of the OPEC meeting.
OPEC in a monthly report released today forecast a “tightening” oil market as demand for its crude rises. Output from Saudi Arabia rose to 8.86 million last month, the most since 2008 and up from 8.8 million in April, according to the group’s Vienna-based secretariat.
Saudi Arabia is “committed to supplying the needs of the market regardless of the disagreement,” Naimi said June 8.
The country “wants everyone to understand that they’re serious” about supplying more oil, Olivier Jakob, an analyst at Petromatrix GmbH in Zug, Switzerland, said today by phone. “It’s important that the Saudis are signaling that they’re offering additional barrels.”
--Editors: Mike Anderson, Justin Carrigan.
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