LONDON, Nov 12: World oil prices tumbled on Monday after Opec kingpin Saudi Arabia said over the weekend that the oil cartel might raise output to help combat high energy rates, analysts said.
New York’s main contract, light sweet crude for December delivery, shed $2.15 to $94.17. Last Wednesday it had hit an historic peak of $98.62.
In London on Monday, Brent North Sea crude for December delivery slumped $1.91 to $91.27. On Wednesday it struck an all-time high of $95.19.
“Crude futures were down following comments from Saudi Oil Minister Ali al Nuaimi, Opec’s most influential voice,” Sucden analyst Michael Davies said on Monday.
Nuaimi had told reporters during a short visit to Kuwait that talk of a hike in output was premature.
But he added: “When Opec meets, we will discuss this issue.” He did not specify which meeting of the Organisation of the Petroleum Exporting Countries he was referring to.
Opec is holding a summit in Riyadh on November 17-18 and ministers are also due to meet in Abu Dhabi on December 5.
Kuwait’s acting oil minister Mohammad al-Olaim meanwhile said that Opec will “not hesitate to shoulder its responsibilities.” He added that the cartel would be willing to increase output “if there is a need to raise production in accordance with market parameters.” Victor Shum, an analyst with energy consultancy Purvin and Gertz, noted that Opec had been “unusually quiet” during the recent record-breaking run for oil prices.
“So any talk of action out of Opec would be calming news,” he added.
Meanwhile recent comments from US Federal Reserve chairman Ben Bernanke that the US economy would likely to be slow in the first part of 2008 also led to falling prices on expectations of lower demand.
Crude oil prices had struck historic heights last week on fears of tight energy supplies in the United States, the world’s biggest energy user.—AFP
