Oil mixed as Saudi commits to supplies

by Noor Bangash Thu Sep 15, 2011 3:36 pm

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SINGAPORE: Crude prices were mixed in Asian trade Tuesday as oil kingpin Saudi Arabia's pledge to ensure sufficient supplies partially eased investor worries, analysts said.

New York's benchmark West Texas Intermediate contract for April delivery fell five cents to $96.92 and Brent North Sea crude for April delivery was up 21 cents to $112.01.

Fears about supply disruption sent Brent soaring close to $120 last week.

Saudi Arabia, OPEC's largest producer, said on Monday it was committed to the stability of the oil market after Libya's crude production dropped as the country is hit by unrest.

The government, in a statement carried by the state-run SPA news agency, said the cabinet met and discussed the anti-regime protests shaking Libya "and their repercussion on oil production in that country."

Saudi Arabia "is committed to the stability of the market" and to ensuring that oil supplies remain available, the statement said, adding that the kingdom hopes Libya's production returns to normal soon.

Chen Xin Yi, commodities analyst for Barclays Capital warned: "While news that Saudi Arabia is increasing its crude output to more than nine million barrels per day, which helped eased concerns about short term supply, the crude oil produced is not an exact substitute for the Libyan's crude."

Libya's opposition forces, in control of the country's major oil installations, said Monday they were resuming oil exports, with the expected departure of a tanker for China.

It will be the first cargo of crude to sail from Libya since February 19, after security forces began a crackdown on anti-regime protesters in the east.

On February 22, Saudi Oil Minister Ali al-Naimi said Riyadh would compensate for any oil supply problems caused by unrest in the Middle East, but added there was no current shortage.

Saudi Arabia pumps around 8.4 million barrels of oil per day, but Naimi said the kingdom still has a spare capacity of another four million. (AFP)