Saudi Arabia, the largest oil producer in the OPEC cartel, said it plans to boost output by 500,000 barrels per day this month to 9.5 million barrels per day in an effort to rein in high oil prices. Saudi will proceed with its plans whether or not OPEC officially decides to increase supply.
The kingdom has the support of its Gulf Arab allies Kuwait and the United Arab Emirates, according to Reuters. Recognizing stubbornly high prices could crimp demand, Saudi is hoping OPEC decides to boost output when the 12-nation group meets in Vienna on Wednesday.
An official told Reuters Saudi production could average 9.5 million to 9.7 million barrels per day this month after averaging 8.95 million barrels a day in May. The last time Saudi was pumping this much crude was when oil was trading at record prices in mid-2008.
While OPEC is expecting demand to increase in the second half of the year on the assumption economic activity will ramp up in industrialized nations such as the U.S., members such as Iran and Venezuela are known to oppose production increases at this time. OPEC is responsible for about 40% of global oil production.