Saudi Arabia plans to increase its oil production by 200,000 barrels a day next month, the kingdom's oil minister told the UN chief on Sunday, according to a United Nations spokesman.

Ali al-Naimi, the Minister of Petroleum and Mineral Resources, met with UN Secretary General Ban Ki-moon in the port city of Jiddah during a one-day trip to the world's largest oil producer, Ban's spokesman Farhan Haq said.

Haq, who is travelling with Ban, said in an e-mail that al-Naimi confirmed Saudi Arabia would increase oil production by 200,000 barrels a day in July, compared to June. In May, the kingdom increased oil production by 300,000 barrels. By July, production should be at 9.7 million barrels a day, Haq said.

Ban also said Saudi Arabia understands that the current price of oil, which topped $139 US per barrel earlier this month, is not normal, according to the official Saudi Press Agency (SPA).

"The king believes that the current oil prices are abnormally high, and he is ready to restore prices to their appropriate levels," SPA quoted Ban as telling reporters in Jiddah. The report carried by SPA was in Arabic, and it did not say what language Ban spoke in.

Saudi Arabia is concerned that sustained high oil prices will eventually slacken the world's appetite for oil, affecting the kingdom in the long run.

Market ignores oil production increase

The 200,000-barrel-a-day boost is not insignificant. It will raise Saudi Arabia's daily production by about two per cent. But to a market that has seen oil prices soar to record heights due in part to strong global demand, the move might be seen as marginal.

The oil market largely ignored Saudi Arabia's 300,000-barrel-a-day output increase last month.

The kingdom has called for a meeting of oil producing and consuming countries on June 22 in Jiddah to discuss ways of dealing with soaring energy prices.

The New York Times reported on Saturday, citing unnamed analysts and oil traders briefed by Saudi officials, that a production increase of about 500,000 barrels a day was to be announced following the meeting.

On Saturday, one of al-Naimi's advisers told The Associated Press that the minister would address the production increase reports the following day. But on Sunday, the adviser, Ibrahim al-Muhanna, said there was no meeting to address the reports scheduled.

Further attempts to reach al-Muhanna by phone later Sunday went unanswered.

Crude prices have reached record highs, surpassing $139 US per barrel on June 6 after surging nearly $11 US in the biggest ever single-day price leap.

Prices had receded by Friday, with the benchmark light, sweet crude for July delivery falling $1.88 US to settle at $134.86 US on the New York Mercantile Exchange. In London, July Brent crude lost $1.84 US to settle at $134.25 US on the ICE Futures exchange.

The current president of the Organization of Petroleum Exporting Countries, Chakib Khelil, has said that the cartel will make no decisions on production levels until its Sept. 9 meeting in Vienna.

OPEC ministers often follow the lead of the Saudis when discussing whether to increase production.