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Oil slips in Asian trading

Oil slips in Asian trading
AFP
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First Published: Wed, Jun 18 2008. 11 59 AM IST
Updated: Wed, Jun 18 2008. 11 59 AM IST
Singapore: World oil prices fell in Asian trade Wednesday ahead of an expected output increase by key producer Saudi Arabia, dealers said.
New York’s main oil futures contract, light sweet crude for July delivery, ropped 65 cents to $133.36 per barrel.
The benchmark contract closed at 134.01 on Tuesday at the New York Mercantile Exchange.
London’s Brent North Sea crude for August delivery fell 72 cents to $133.
Ken Hasegawa, a manager at the energy department of Newedge Japan brokerage in Tokyo, said that prices were easing on profit-taking ahead of the Sunday meeting organised by Saudi Arabia to discuss the market.
“Prices are expected to remain rangebound until it breaks 130,” he said.
UN Secretary General Ban Ki-Moon announced Sunday that Saudi Arabia had told him it would increase its oil output by 200,000 barrels a day in July.
The remarks sparked speculation about the prospects of an easing of tight crude oil supplies.
“We can expect some surprises at the meeting but it may have no immediate effect to cool down the market as it would still be in the uptrend,” Hasegawa said.
Iran said it would oppose any move by Saudi Arabia, the largest oil producer in the Organisation of the Petroleum Exporting Countries (Opec), to raise its output without a consensus from fellow members of the oil cartel.
“If Saudi Arabia takes a measure to unilaterally increase (oil) output, it is a wrong move,” Mohammad Ali Khatibi, Iran’s new representative to Opec, was quoted as saying Tuesday.
Iran is Opec’s number two producer and has consistently argued that the high oil price has nothing to do with market fundamentals and that Opec’s output should not be increased.
On Tuesday, Iranian President Mahmoud Ahmadinejad said that the current high price of oil was artificial and the market was well supplied.
“The rise in consumption is lower than the rise in production,” Ahmadinejad said. “Certain hands, for political and economic ends, are controlling the price in an artificial manner.”
Opec, which pumps about 40% of oil supplies and has been widely blamed for the five-fold rise in prices since 2003, insists the oil market is well supplied.
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First Published: Wed, Jun 18 2008. 11 59 AM IST
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