How long will this dip last?
Oil Falls for a Second Day as Saudi Arabia May Increase OutputJune 16 (Bloomberg) -- Crude oil fell for a second day in New York on speculation Saudi Arabia will increase production, reducing risks to global growth from near-record energy prices.
Saudi Arabia, the world's biggest oil exporter, may announce an output increase at a meeting it is hosting in Jeddah on June 22, an OPEC official said yesterday. The Middle East kingdom will pump an extra 200,000 barrels a day next month, Agence France- Presse reported yesterday, citing United Nations Secretary- General Ban Ki-Moon. This would boost world supply by 0.2 percent.
``I wouldn't be surprised if they do'' increase output, Peter McGuire, managing director of Commodity Warrants Australia Pty in Sydney, said in a Bloomberg Television interview. ``It's just a little bit in their hands. When you control the spigot, you control the refineries, you control the whole game.''
Crude oil for July delivery fell as much as $1, or 0.7 percent, to $133.86 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $134.05 a barrel at 12:01 p.m. in Singapore.
The contract dropped 1.4 percent to settle at $134.86 a barrel on June 13, taking last week's decline to 2.7 percent.
``Everybody is going to take a wait and see approach on this,'' said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. ``It's prudent for people to back off and see what happens.''
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