Opec opening the taps in a bigger way!!!
Crude Oil Falls as Saudi Arabia Calls for Higher Production
Crude Oil Falls as Saudi Arabia Calls for Higher Production
London, Aug. 31 (Bloomberg) -- Crude oil fell almost 1
percent after Saudi Arabia yesterday called on producers to boost
supply, adding to expectations the Organization of Petroleum
Exporting Countries will raise quotas at a meeting on Sept. 10.
Saudi Arabia's King Fahd told Oil Minister Ali al-Naimi to
work with fellow OPEC members for a ``suitable increase in
production'' to lower prices, the Saudi Press Agency said. Oil
also fell because prices failed to close above $32 a barrel
yesterday, analysts said, a sign to some traders of reluctance to
pay higher prices.
``There may be a bit more considered appreciation of the
Saudi comments,'' said Lawrence Eagles, an analyst at GNI Research
Ltd.
Crude oil for October settlement fell as much as 28 cents to
$31.70 a barrel on London's International Petroleum Exchange,
where they have gained about 27 percent this year. Crude oil for
October delivery was down 11 cents at $33.21 a barrel in
electronic trading on the New York Mercantile Exchange.
Saudi Arabia in July proposed an output increase of 500,000
barrels daily, which was rejected by Iran, Venezuela and other
OPEC members. The latest statement leaves open the amount of any
increase, and prices may rise again soon, analysts said.
Crude oil in London has gained 50 percent in the past year,
even after OPEC boosted output quotas from April 1 and July 1.
OPEC, which supplies two in every five barrels of oil, is coming
under renewed pressure from the U.S. and other consumers to raise
output for a third time this year.
Inventories of crude oil in the U.S. last week rose a greater-
than-expected 5.3 million barrels, or 1.8 percent, to 286.0
million barrels, according to a report by the American Petroleum
Institute.
Still, U.S. supplies are 10 percent below levels a year ago,
while inventories of heating oil are down 40 percent. The gap has
sparked concern that U.S. refiners may be unable to make enough
heating fuel to meet winter demand in the Northern Hemisphere.
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