According to reports received Saudi Arabia will produce 9.7 million barrels of oil a day next month, an increase of 200,000 barrels from June's level, King Abdullah told United Nations Secretary-General Ban Ki-Moon , according to a UN spokesman. Prices earlier climbed to a record $139.89 after a fire cut North Sea output and the dollar declined against the euro, bolstering the appeal of commodities.
The possible Saudi production increase and the North Sea fire don't warrant a price swing of more than $5, we weren't able to get to $140, then fell to little changed, and suddenly without a warning prices were more than $1 lower. This market is being whipped around.
Crude oil for July delivery fell 25 cents to settle at $134.61 a barrel at 2:49 p.m. on the New York Mercantile Exchange. Prices are up 98 percent from a year ago.
Saudi Arabia has called a meeting for June 22 in Jeddah to help stabilize prices. Crude-oil prices fell 2.7 percent in New York last week as Saudi Oil Minister Ali al-Naimi described the surge in the commodity as ``unjustified'' and called the Jeddah meeting of producers, major industrial nations and banks.
The expectations for the meeting are too high, the Saudi increases that are being talked about aren't that large. Given that global oil demand is about 86 million barrels a day it will take a big chunk to make a difference.
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