Saudis slightly boost oil output as Bush visits

By Tabassum Zakaria and Matt Spetalnick

RIYADH (Reuters) - Saudi Arabia announced a modest increase in oil output on Friday after an appeal from visiting President George W. Bush but the news did little to douse prices that hit a new record earlier in the day.

On his second visit to the world's biggest oil-exporter this year, Bush renewed his call for OPEC to increase production amid rising pressure at home to take action as soaring fuel prices weigh on the U.S. economy.

Saudi Arabia said it had raised output by 3.3 percent last week, and was willing and able to raise output further but saw no customer demand.

"Customers, where are you? I want to sell oil but where are the customers? I can't sell oil just to be stored at sea," Saudi Foreign Minister Prince Saud al-Faisal told a news conference.

Asked about Bush's response, Prince Saud said: "He was satisfied."

Saudi Oil Minister Ali al-Naimi told U.S. officials that increased output would not reduce costs at the pump for U.S. motorists as soaring prices were mainly the result of a weak dollar, speculation and tensions in oil-producing countries.

Since Bush last visited Saudi Arabia in January, oil prices have jumped some $30 to a new record near $128 a barrel on Friday, adding to U.S. recession fears during a presidential election year in which voters who will choose Bush's successor are increasingly focused on the faltering economy.

"What the president said is, we need to be doing all we can do to deal with this problem," Stephen Hadley, White House national security adviser, told reporters. "The message that came back from the Saudis are, we hear you, we know the markets are under pressure and we're doing all we can do."