Despite Saudi Arabia’s Plan To Raise Output, Oil Prices Slip

THE fall in oil prices continued yesterday after the world’s top crude exporter, Saudi Arabia, said it was ready to raise output to new record highs, potentially adding to a global supply glut.

Besides, the U.S. currency strengthened against the euro, also weighing on dollar-denominated oil, after the International Monetary Fund pulled out of stalled debt talks with Greece.

Saudi authority said it was in talks with Indian buyers to supply additional crude, meaning the Middle Eastern exporter could top its record of 10.3 million barrels per day produced in May.

According to Reuters, Brent crude traded 32 cents lower at 64.79 dollars a barrel, while U.S. light crude was down 53 cents at $ 60.24 .

“The dollar is gaining some ground against the euro. If anything that’s bearish for oil,” said Tamas Varga, oil analyst at London brokerage, PVM Oil Associates.

The euro slipped 0.4 per cent against the dollar after stalling Greek debt talks increased the risk of Greece being pushed out of the euro zone.

The International Energy Agency (IEA) had on Thursday said it expected world oil demand to rise more than expected this year on the back of economic recovery and a relatively cold winter in the northern hemisphere.

However, analysts at JBC Energy said this growth was focused on the first half of the year, meaning demand would tail off by the end of the year.