A PLEDGE by Saudi Arabia to pump more oil had little effect on the price of a barrel of crude yesterday.

Ali al-Naimi, Oil Minister of Saudi Arabia, the leading producer in the Organisation of Petroleum Exporting Countries (Opec), said he would support a 500,000 barrel increase in the cartel’s daily output. But the price of US Light crude lost just 63 cents to $53.80 a barrel.

The Saudi minister’s comments were not supported by more hawkish Opec members, such as Iran, Libya and Algeria, which have argued in favour of maintaining the current quota ceiling of 27 million barrels a day.

Analysts question whether Opec has the capacity or the will to bring crude prices back to levels more acceptable to consumers. Saudis worry that they will come under pressure from Washington if the price remains high this summer. However, Leo Drollas of the Centre for Global Energy Studies calculates that the kingdom needs a relatively high price to pay for its escalating financial commitments. “The bare minimum for them is an Opec basket price of between $38 and $40 per barrel,” said Dr Drollas, equivalent to a Brent price of about $42. “For Saudi Arabians, a $45 oil price is about right even if it is not good news for the six billion rest of us,” he said.

Saudi pricing power remains strong — output growth from its main rival, Russia, is slowing and the kingdom accounts for 1 million of the approximate 1.5 million barrels a day margin of spare production capacity in the cartel.

The impact of soaring oil prices was underlined yesterday as it was reported that UK manufacturers’ input costs rose at an annual rate of 10.8 per cent in February, the highest figures since April 1995.

More than half of the rise was attributed to oil costs.

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