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Oil fell more than US$1 yesterday to below US$95 after Saudi Arabia said that Opec would discuss boosting oil output at an upcoming meeting to cool surging oil prices.
US light crude for December delivery fell as much as US$1.46 in early electronic trading and was down US$1.38 at US$94.94.
US oil struck a record high of US$98.62 a barrel last Wednesday due to winter supply concerns and a falling US dollar.
London Brent crude lost US$1.18 to US$92.00 a barrel.
Saudi Arabia, the world's top oil exporter, said on Sunday the exporter group would discuss an increase in output at an upcoming meeting in an effort to cool record prices nearing US$100 a barrel.
Saudi Oil Minister Ali al-Naimi did not make clear whether he was referring to an Opec heads of state meeting in Riyadh later this week or its next formal policy meeting on December 5 in Abu Dhabi. Qatari Energy Minister Abdullah al-Attiyah said later on Sunday that he did not expect an output decision in Riyadh.
But the fact that al-Naimi, the cartel's most influential voice, raised the possibility of an increase put traders on alert after a more than 40 per cent surge in prices since mid-August, which most ministers have blamed on speculation, politics and a weak dollar.
"This [increase in output] is premature but we will discuss the issue when we meet," Naimi told Reuters in Kuwait in what appeared to be his first public comments since oil vaulted above US$80 for the first time two months ago.
The rally has barely paused since then, despite the 500,000 barrels per day increase in production that Naimi persuaded his peers to accept at their last meeting in September.
Analysts said the decline in Asia's stock markets, led by Wall Street's sharp losses on Friday, could also be weighing on oil prices.
- Reuters
