Oil prices weaken on Saudi Arabia's stance
Oil prices weakened in afternoon trade Wednesday after Saudi Arabia, the world's leading oil producer, said it would work with fellow OPEC members to bring about an "appropriate increase" in production.
Benchmark Brent crude for October delivery was trading at 30.97 dollars a barrel, 39 cents lower than Tuesday's close.
In New York, light sweet crude for October delivery slipped 56 cents to 32.18 dollars a barrel.
Analysts attributed the falls to a statement issued by Saudi Arabia, saying Saudi Oil Minister Ali al-Nuaimi had been instructed to hold talks with fellow OPEC members "to guarantee once again balance on the market and stability of prices."
Earlier in the day, prices had already weakened following publication of data by the American Petroleum Institute showing a rise in US stock levels, although falls were limited as analysts commented that stock levels were still too low.
The institute reported that crude oil stocks had risen by 5.261 million barrels to 286.0 million in the week to August 25 from the previous week and were 31.70 million barrels lower than a year ago.
Petrol (gasoline) stocks fell by 3.07 million barrels to 199.13 million over the week and by 4.75 million barrels over the year.
Distillate fuel stocks climbed by 1.04 million barrels to 112.22 million over the week and fell by 29.35 million over the year.
Saudi Arabia triggered a steep fall in prices at the start of July when it promised an early output increase unless prices stabilised.
But the extra oil was not forthcoming, as fellow OPEC members criticised Saudi's "unilateral" stance, although they later pledged an increase output under the terms of a price band mechanism.
The device provides for an automatic output increase of 500,000 barrels per day if prices stay above 28 dollars a barrel for 20 consecutive days.
Prices have stayed over the 28 dollar mark since mid August, meaning an output increase would not be triggered until just before the September 10 Organisation of Petroleum Exporting Countries (OPEC) ministerial conference that will formally consider output levels. - (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)