The current level of oil production is fulfilling market demand, Saudi Arabia's Oil Minister Ali Al-Naimi said in remarks carried by the state news agency.

 "(Saudi Arabia) is permanently seeking to take into consideration the interest of consumers and producers and to achieve a balance between supply and demand," SPA quoted Al-Naimi as saying at a cabinet meeting chaired by King Abdullah.

"The kingdom sees that quantities produced at the present time fulfil the market needs ... and that the production capacity can meet any additional and real energy needs," he added.

Saudi Arabia, the world's largest oil exporter and the Organization of the Petroleum Exporting Countries' most influential member, said on Friday it had raised output by 300,000 barrels per day.

Al-Naimi announced the increase while US President George W Bush was visiting Riyadh.

Bush said on Saturday that he was pleased with the Saudi decision to boost output but that it was insufficient to solve problems in the world's largest energy consumer.

High oil prices are weighing on a US economy already hit hard by a housing slump and credit crisis.-Reuters