EuroLinks Daily View: Oil Shies Away From $100 a Barrel
While crude-oil futures remain expensive, a recent slide in prices may mean the $100-a-barrel mark is out of reach, at least for now. After hitting an intraday high of over $98 last week, U.S. benchmark crude has fallen, shedding 2.4% to $92.33 as of late Tuesday morning on the New York Mercantile Exchange.</br></br>A cluster of indicators explains the slip, including a slight firming of the dollar and growing daily output in Iraq, Angola and Saudi Arabia. A report from the International Energy Agency made a case for flagging demand -- the IEA lowered its prediction for fourth- quarter world demand by 500,000 barrels a day, thanks to signs of flagging demand in the U.S. and the former Soviet states.</br></br>But reassuring words from Ali Naimi, Saudi Arabia's oil minister and the de facto leader of the Organization of Petroleum Exporting Countries, also help. The world economy "is resilient and continues to be resilient," he said, and Saudi Arabia, the world's largest oil supplier, doesn't foresee a U.S. recession.</br></br>Mr. Naimi has left open the possibility that OPEC may decide to raise its output ceiling next month, when ministers meet formally to discuss policy. This week, OPEC heads of state gather in Riyadh, Saudi Arabia, for a rare top-level, largely formal summit. Such a discussion wouldn't occur this week, he said. But Saudi Arabia is taking advantage of this week's media spotlight to assert that it has plenty of oil and no supply problems, as some analysts have argued.</br></br>Read the report from Neil King Jr. in Riyadh, Saudi Arabia, and Ann Davis in Houston: http://online.wsj.com/article/SB119500496515792235.html