SINGAPURA: Oil dropped for a fourth day in New York after Saudi Arabian Oil Minister Ali al-Naimi said OPEC may need to increase its production quota.
Futures slumped as much as 2 percent, after sliding 1.7%t yesterday. The Organization of Petroleum Exporting Countries “maybe” needs a collective output ceiling higher than the current 30 million barrels a day, al-Naimi said in Vienna.
U.S. gasoline stockpiles probably climbed to the highest level in five weeks even as crude supplies fell, according to a Bloomberg News survey before an Energy Department report.
Oil for July delivery dropped as much as US$1.63 to US$81.07 a barrel in electronic trading on the New York Mercantile Exchange, and was at US$81.41 at 9:30 a.m. Sydney time. The contract declined to $82.70 yesterday, the lowest close since Oct. 6. Prices are down 18 percent this year.
Brent oil for July settlement slipped US$1.47, or 1.5%, to US$98 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to West Texas Intermediate closed at $15.30.
Al-Naimi was responding to questions from reporters yesterday after the Gulf Oil Review quoted him as saying in a June 2 to June 3 interview that Saudi Arabia’s analysis suggests OPEC needs a higher production ceiling.
The cartel, which supplies 40% of the world’s crude, meets in Vienna on June 14 to decide on output levels for the second half of the year. Its 12 members exceeded their quota by 1.9 million barrels a day in April, according to the International Energy Agency. (Bloomberg/tw)