Oil below 96 dollars after OPEC comments

Oil below 96 dollars after OPEC comments

	Published : Mon, 12 Nov 2007 04:46 By : Agencies Print this Story

SINGAPORE (Thomson Financial) - Oil prices fell by more than a dollar in Asian trade on Monday after OPEC kingpin Saudi Arabia indicated the oil cartel will discuss raising output if the need arises.

At 10:35 am (0235 GMT), New York's main contract, light sweet crude for December delivery, dropped 1.02 US dollars to 95.30 dollars a barrel from 96.32 dollars in late US trades Friday.

Brent North Sea crude for December delivery eased 93 cents to 92.25 dollars.

Prices were pressured lower following comments on Sunday by Saudi Arabia, the world's biggest oil producer, and by Kuwait that the Organisation of the Petroleum Exporting Countries (OPEC) is prepared to act if needed.

'OPEC has been unusually quiet during those sharp rises in oil prices over the past couple of weeks and so any talk of action out of OPEC would be calming news,' said Victor Shum, an analyst with energy consultancy Purvin and Gertz.

Ali al-Nuaimi, the Saudi oil minister, told reporters during a short visit to Kuwait that talk of a hike in output is premature.

'When OPEC meets, we will discuss this issue,' he said.

He did not specify which meeting of the cartel 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 said OPEC will 'not hesitate to shoulder its responsibilities.'

He said the cartel would be willing to increase output 'if there is a need to raise production in accordance with market parameters.'

Comments by Federal Reserve chairman Ben Bernanke last week that the US economy would likely slow in the first part of 2008 remained a source of concern for traders, who fear energy demand would be affected.

'With the cautionary comments coming last week from the US Federal Reserve about the fate of the US economy, that has provided a reason for traders to pull back the pricing,' said Shum.

New York oil prices rose to a record 98.62 dollars on November 7, driven by concerns over tight global supplies and the dollar's slide against the major currencies.

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