Crude Oil Declines as Saudi Arabia Says Market Is ‘Oversupplied’ – Bloomberg

Posted on April 18, 2011 by

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Oil declined for the first time in four days in New York after Saudi Arabia, the world’s biggest exporter, said the global market has adequate crude supplies.

Futures slipped as much as 0.5 percent after Saudi Arabia’s Oil Minister Ali al-Naimi said yesterday that the “market is oversupplied.” Crude fell 2.8 percent last week on speculation gains in prices, spurred by conflicts in the Middle East, will curb economic expansion. The World Bank said last month East Asia needs to tighten monetary policy and governments should let stimulus packages lapse.

“You don’t see a major supplier of crude make comments like that unless there’s a genuine feeling to get prices lower,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “If the price is too high as stimulus packages come off, you’re going to grind to a halt quickly.”

Crude oil for May delivery slid as much as 56 cents to $109.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $109.21 at 10:17 a.m. Sydney time. The more actively traded June contract decreased 51 cents, or 0.5 percent, to $109.71.

Brent crude oil for June settlement traded at $123.12 a barrel, down 33 cents, on the London-based ICE Futures Europe exchange. The contract fell 2.5 percent last week to $123.45.

Unrest in Libya, which has cut crude production from Africa’s third-biggest producer, is the bloodiest in a wave of uprisings that has toppled leaders in Egypt and Tunisia and spread to Algeria, Bahrain, Iran, Oman, Syria and Yemen.

Syrian President Bashar al-Assad told his newly appointed cabinet that plans to lift the country’s 48-year-old state of emergency must be completed next week while in Libya rebels said they expected to receive heavy weapons in their battle to overthrow Muammar Qaddafi.