Oil slips on Saudi signal
Reuters, London
Oil prices eased on Thursday as traders took profits from Wednesday's sharp rally when U.S. crude oil inventories fell and Saudi Arabia signaled that prices had dropped far enough. U.S. light crude slipped 20 cents to $36.85 a barrel after rising nearly 4 percent on Wednesday. London Brent was down 13 cents at $34.36 a barrel. Wednesday's price rise stemmed a month long slide that took oil prices down around $6 or 15 percent from 21-year highs struck in early June. Saudi Arabia, the world's biggest oil exporter raised supply to about 9.1 million barrels a day (bpd) in June, well above its formal Opec quota, to cool high prices. Saudi Oil Minister Ali al-Naimi said on Wednesday that prices were now fair and did not see any reason to change current output levels. Tony Nunan, manager at Mitsubishi Corp.'s international petroleum business in Tokyo, said $35 looked like it would be a floor for U.S. crude given traders' concern over tensions in the Middle East. "The situation in Iraq and Saudi Arabia is stable for now but another attack is possible at any time," he said. Crude exports from Iraq have recovered close to two million barrels daily following attacks on key pipelines earlier this month. Naimi said Opec would decide at a scheduled cartel meeting on July 21 whether to make a scheduled 500,000 barrels a day increase in formal quotas from August 1.
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