Oil Slides as Saudis Said to Reject Quotas : Hope Dims That OPEC Will Hold Talks on Pricing in Near Future

Oil prices fell Monday by as much as 70 cents a barrel in response to reports that Saudi Arabia, OPEC’s largest producer, had rejected calls for new restrictions on production.

On the New York Mercantile Exchange, contracts for April delivery of West Texas Intermediate, the benchmark crude, lost 70 cents to settle at $15.59 a 42-gallon barrel.

The contract had moved above $16 late last week after members of the Organization of Petroleum Exporting Countries called for a meeting of the cartel’s pricing committee to stabilize market prices. In addition, officials of non-OPEC producers met last week to discuss similar concerns.

“The Saudis believe that, if current quotas are maintained, inventories are going to come down gradually,” said Bob Baker, an analyst with Prudential-Bache Securities Inc.

The Saudis’ apparent rejection of new quotas, attributed to officials attending an Arab Energy Conference in Baghdad, also dimmed hopes that key members of the 13-nation OPEC cartel would convene an emergency pricing meeting any time soon.

As the mood on prices turned bearish, near-term contracts for refined products also turned downward. Wholesale gasoline for April delivery lost 1.23 cents to 44.36 cents a gallon. Wholesale heating oil fell 1.35 cents to 43.34 cents a gallon.

Analysts said the slide in prices was accelerated by technical factors as traders dumped contracts purchased in the midst of the rally late last week.

“Everyone remains very, very nervous and unsure of the (market’s) direction,” said Richard Redoglio of Merrill Lynch Energy Futures.

OPEC oil was selling for between $12 and $14 a barrel on the international market compared to the cartel’s official $18-a-barrel benchmark price.

On the European spot market, where oil is sold to the highest bidder, the United Arab Emirates’ Dubai light--the most important OPEC crude from the Middle East--plummeted 45 cents to $12.75 a barrel.