ENERGY : Oil Prices Tumble on Fears Saudis May Hike Production
Oil prices fell sharply Tuesday on fears that Saudi Arabia, the world’s biggest exporter, has abandoned its single-handed monthlong attempt to support the sagging market.
Traders, alerted to a change in the Kingdom’s oil pricing, said the Saudis may be intent on forcing prices lower to punish other OPEC members for producing above their allotted quotas.
But Saudi Oil Minister Hisham Nazir said Riyadh was abiding by its OPEC quota. There was no truth in reports that the Saudis were linked to the changing oil market situation, he said in a statement carried by the Saudi Press Agency.
Traders expressed concern that the Saudis, exasperated by continued quota violations by others in the Organization of Petroleum Exporting Countries, may soon increase output again to push down prices and punish the quota transgressors.
In New York, West Texas Intermediate, the U.S. benchmark crude, fell 46 cents to $16.68 a barrel--its lowest level in more than two months--while overseas oil prices dropped even further.
North Sea Brent Blend, the most widely traded grade of crude, was quoted below $15 a barrel for the first time since December, 1988. A barrel of Brent fetched $23 early this year.
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