Saudi Arabia May Boost Oil Output

 Oil surged over $100 in American trading today and near $120 in British markets. This comes as some of Libya's oil production has been cut off due to the crisis in the North African nation. Much of Europe is dependent on Libyan oil while the United States has minimal trade in oil from Tripoli.

But the shockwaves have affected the price of oil, sending them into 2008 levels. This also may affect more than just price, but put in some automatic stabilizers of supply.

Saudi Arabia is looking to boost oil production to prevent the Libyan shortfall from busting the market.

“Right now, there are active talks in order to implement what is needed,” the Saudi oil official added. He stressed that the kingdom retained spare capacity of some 4m barrels a day – more than than double Libya’s entire output which totalled 1.58m b/d in January, according to the International Energy Agency.
Saudi Arabia has not yet decided whether to increase its output in response to Libya’s crisis, the official added.

 High prices do benefit the countries of the Middle East. But this time the Saudis may come under more pressure in the weak economy. Whether they'll actually turn on the spigot is unknown at this point.

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