Oil slightly lower after nearing 140 dollars
Wednesday, 18 June 2008
SINGAPORE, June 17 (AFP): Oil prices fell slightly Tuesday after surging to all-time highs close to 140 dollars amid uncertainty that a reported pledge by Saudi Arabia to increase output would curb costs, dealers said.
The main New York futures contract, light sweet crude for July delivery, dropped 15 cents to 134.46 dollars per barrel after striking an intraday record of 139.89 dollars on the New York Mercantile Exchange Monday.
Brent North Sea crude for August delivery slipped 36 cents to 134.35, after settling at 134.71 Monday following an intraday spike to a record 139.32 dollars.
"The factors which have been driving the volatile market have waned a little bit," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney.
Market speculation has been rife ahead of Saudi Arabia's unusual summit of oil producing and consuming nations, to be held Sunday in Jeddah, to discuss runaway oil prices.
United Nations Secretary General Ban Ki-Moon said Sunday that Saudi Oil Minister Ali al-Nuaimi had told him the kingdom, which has a quarter of the world's proven oil reserves, would raise oil output by 200,000 barrels per day (bpd) in July.
But Ban said Nuaimi also indicated that oil-consuming countries should play their part to stabilise prices by reducing national taxes and combating speculators.
Kevin Norrish, at Barclays Capital, said the reported increase in Saudi Arabia's output, to 9.7 million bpd in July, would mark the highest monthly rate since August 1981.
"However, in our view, the move does not seem to be enough to reverse the recent strength in prices, as it does little to repeal the longer-term expectations for tight demand-supply balances."
In Washington, the White House said Monday it does not expect the Jeddah meeting to result in any commitments to increased production.
The main New York futures contract, light sweet crude for July delivery, dropped 15 cents to 134.46 dollars per barrel after striking an intraday record of 139.89 dollars on the New York Mercantile Exchange Monday.
Brent North Sea crude for August delivery slipped 36 cents to 134.35, after settling at 134.71 Monday following an intraday spike to a record 139.32 dollars.
"The factors which have been driving the volatile market have waned a little bit," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney.
Market speculation has been rife ahead of Saudi Arabia's unusual summit of oil producing and consuming nations, to be held Sunday in Jeddah, to discuss runaway oil prices.
United Nations Secretary General Ban Ki-Moon said Sunday that Saudi Oil Minister Ali al-Nuaimi had told him the kingdom, which has a quarter of the world's proven oil reserves, would raise oil output by 200,000 barrels per day (bpd) in July.
But Ban said Nuaimi also indicated that oil-consuming countries should play their part to stabilise prices by reducing national taxes and combating speculators.
Kevin Norrish, at Barclays Capital, said the reported increase in Saudi Arabia's output, to 9.7 million bpd in July, would mark the highest monthly rate since August 1981.
"However, in our view, the move does not seem to be enough to reverse the recent strength in prices, as it does little to repeal the longer-term expectations for tight demand-supply balances."
In Washington, the White House said Monday it does not expect the Jeddah meeting to result in any commitments to increased production.