Saudi may boost oil output if needed

WASHINGTON/RIYADH (Reuters) – The leader of Saudi Arabia promised President Donald Trump that he can raise oil production if needed and the country has two million barrels per day of spare capacity, the White House said on Saturday, rowing back on an earlier Trump tweet that appeared to suggest the Saudis had agreed to boost output by that amount.

Trump told King Salman bin Abdulaziz Al Saud that the oil market could need more supply when the men spoke on Friday, the White House said. The Saudi leader said he was ready to raise output if needed, the White House said in a statement.

“King Salman affirmed that the Kingdom maintains a two million barrel per day spare capacity, which it will prudently use if and when necessary to ensure market balance,” read the statement

However, a source familiar with Saudi Arabia’s production plans told Reuters earlier in the week of the kingdom’s intention to increase output by 200,000 bpd this month.

Saudi Arabia along with other Organization of Petroleum Exporting Countries (OPEC) and non-OPEC nations, including Russia, had agreed on June 22 to boost production by a combined 700,000 to one million barrels a day, so any two million bpd-increase would be at least double market expectations.

The White House statement undercut a tweet by Trump earlier in the day when he wrote that Saudi Arabia had definitely agreed to produce more oil.

“Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference ... Prices to high! He has agreed!” Trump tweeted.

In the tweet, Trump said the extra Saudi oil would help offset a decline in supply from Iran, after the US pulled out of the Iran nuclear deal in May and moved to reimpose oil sanctions.