Business | Oil & Gas
Saudi decision to boost oil output lowers prices
Oil prices eased slightly on Tuesday - following a wild, record-setting session the previous day - as investors weighed expectations of higher Saudi Arabian output against the market's ability to quench soaring global demand.
- AP
- Published: 21:40 June 17, 2008
New York : Oil prices eased slightly on Tuesday - following a wild, record-setting session the previous day - as investors weighed expectations of higher Saudi Arabian output against the market's ability to quench soaring global demand.
Light sweet crude for July delivery fell 62 cents to $133.99 a barrel on the New York Mercantile Exchange, but posted occasional gains. In London, August Brent crude futures fell 73 cents to $134 on the ICE Futures exchange.
Crude prices fluctuated widely at the start of the week, surging at one point to a record $139.89 per barrel Monday and tumbling as low as $132.84 before settling at $134.61 a barrel, down 25 cents.
Victor Shum, an energy analyst with Purvin & Gertz in Singapore, said price swings of $5 a barrel aren't unusual anymore.
"The issue really is global oil demand is growing at a reasonable pace and supply is still playing a catch up game," he said. He said further price spikes are possible as the summer progresses.
Traders are watching for further signs from Saudi Arabia. Over the weekend, the Opec giant told UN chief Ban Ki-moon that it would increase oil output by 200,000 barrels a day, or by two per cent, from June to July. In May, the country raised production by 300,000 barrels a day.
Saudi Arabia has called a meeting of oil producing and consuming nations in Jeddah on Sunday to seek ways to tackle oil prices.
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