Saudi oil boost quells price fears
SAUDI Arabia has ramped up oil production by 300,000 barrels a day to quell rising fears of a potential worldwide shortage.
Despite the move oil was barely changed at $33.50 a barrel, near one-month highs and almost twice the lows hit in late 2001.
US prices leapt sharply on Monday. American stocks are surprisingly low, raising concerns that the world's biggest economy may run short during this summer's peak demand months.
Higher oil prices will put upward pressure on inflation and may dent western economic growth by taking money out of consumers' pockets.
The International Energy Agency raised its global demand forecasts for the sixth month in a row, after China's runaway industrial boom boosted that country's oil imports 36% in the first quarter.
China's economy expanded 10% during the quarter, despite growing government attempts to apply the brakes.
The worsening position in Iraq has added to oil prices. The Opec cartel recently announced controversial output cuts but analysts increasingly doubt whether they will materialise.
