Saudi oil output promise fails to dent prices

A pledge by Saudi Arabia to increase its daily oil output by 200,000 extra barrels has failed to prevent further price rises.

Yesterday the world's largest oil-producer said it would increase its output in July for the third month running.

But on Monday US light crude was up almost one per cent to $136.35, while London Brent rose 1.21 per cent to $136.07.

Soaring oil prices have translated into fuel price rises, prompting consumer and worker protests around the world.

At a top-level summit in Jeddah this weekend Saudi Arabia pledged to produce 9.7 million barrels of oil a day in July to help ease pressure on producing and consuming nations.

"Given our current spare capacity, today I would like to state that for the remainder of this year Saudi Arabia is prepared and willing to produce additional barrels of crude oil above and beyond the 9.7 million barrels per day," the country's oil minister Ali al-Naimi announced.

But analysts have pointed to the lack of firm commitment from Opec to follow Saudi Arabia's lead.

Its president Chakib Khelil was asked in Jeddah whether the production drive would result in price falls and replied: "I don't think so."