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Bloomberg: Oil Rises as Saudi Pledge Fails to Ease Global Supply Concerns


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Oil rose to within $3 of a record on speculation Saudi Arabia's output increase may not raise global supply because of production halts in Nigeria and the North Sea.

The world's biggest oil producer will pump an extra 200,000 barrels a day next month, Saudi Arabia's Oil Minister Ali al- Naimi said in Jeddah yesterday. Militant attacks on Royal Dutch Shell Plc and Chevron Corp.'s facilities in Nigeria last week halted more than 300,000 barrels a day. North Sea output has fallen after two emergency platform evacuations.

``Any effect that the extra Saudi oil might have had in cooling prices is being offset by the latest woes in Nigeria and the North Sea,'' said Christopher Bellew, a senior broker at Bache Commodities Ltd. ``The decision in Jeddah really just confirmed what Saudi Arabia had already said they'd add.''

Crude oil for August delivery rose as much as $2.14, or 1.6 percent, to $137.50 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $136.61 a barrel at 10:34 a.m. London time.

The July contract expired on June 20, gaining $2.69, or 2 percent, at $134.62 a barrel. Futures reached a record $139.89 on June 16.

``At the end of the day, the Saudis pretty much told us there was not much they could do immediately,'' Peter Beutel, president of New Canaan, Connecticut-based Cameron Hanover Inc., said in a Bloomberg Television interview. ``We already had a 200,000 barrel-a-day increase built into the market.''

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