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Saudi oil chief seeks to allay supply worries

BEIRUT -- As oil prices soared to new heights after a terrorist attack in Saudi Arabia, the nation's influential oil minister tried to reassure markets yesterday that OPEC would do its best to provide adequate supplies.

Saudi Arabia was boosting its own production, but not because the United States had pressured it to do so, Oil Minister Ali Naimi said. He reiterated that he would push for the Organization of Petroleum Exporting Countries to raise its output ceiling by 2.5 million barrels a day, or 11 percent, when the group meets tomorrow in Beirut to consider increases in production.

''OPEC will do its best to make the fundamentals right," Naimi said.

OPEC pumps more than a third of the world's oil, and its talks in the Lebanese capital are drawing exceptional attention. Crude prices have soared to uncomfortable heights in recent weeks due to a combination of strong global demand, low inventories in importing nations, and fears about instability in key oil-producing states in the Middle East.

However, the weekend attacks at the eastern Saudi oil center of Khobar that left 22 people dead, most of them foreigners, have caused fresh alarm by exacerbating fears that terrorists could cripple the kingdom's ability to export crude.

The effects of the attack rippled to neighboring oil producers in the Gulf. Asked whether Kuwait had strengthened security at its own oil facilities as a result, Kuwaiti Oil Minister Sheik Ahmed Fahd Al Ahmed Al Sabah replied, ''Sure, sure, sure."

Saudi Arabia was among those who argued as late as March for a reduction in OPEC output to forestall an expected decline in seasonal demand. However, the surprise increase in prices has led the Saudis to urge a reversal in strategy. If prices stay high, consumers could seek alternatives to oil, and non-OPEC producers could glut the market with their own crude.

In Washington, Secretary of State Colin Powell said he has no doubt about the ability of the Saudis to continue to be a reliable oil supply source.

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