Oil falls as Saudi Arabia reassures more output

09:04, March 01, 2011      

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Crude prices fell on Monday as Saudi Arabia reassured the extra oil needs caused by unrest in Libya had been made up with more output.

For the whole February, U.S. oil price was up 6.5 percent, having risen sharply as the unrest in Libya caused supply disruption and spurred fears that tensions could spread to other oil producers in the Middle East and North Africa. Last Thursday, oil price touched 103 U.S. dollars a barrel, the highest intra-day level since September 2008.

Earlier Monday, International Energy Agency chief economist Fatih Birol said around half of Libya's production of 1.6 million barrels per day had been cut. But according to other estimates, three-quarters of oil production in the OPEC's member state have been suspended.

Saudi Arabia, the most important oil exporter in the world, pledged to raise output in order to calm down the panic markets. And on Monday, Saudi Aramco CEO Khalid al-Falih told reporters the extra supply needs caused by Libya's unrest had been met. Concerns in the markets had been eased, which pulled back the surging prices.

Light, sweet crude for April delivery dropped 91 cents to settle at 96.97 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude also retreated from a multi-year high and settled down 34 cents at 111.80 dollars a barrel, up 9.9 percent comparing to the price of Feb. 1.

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