Oil prices were narrowly mixed Wednesday after Saudi Oil Minister Ali Al-Nuaimi refused to be drawn over whether OPEC would decide to increase crude output at an upcoming meeting, dealers said.
Crude futures had slumped Tuesday, losing more than three dollars on increasing speculation that the Organization of Petroleum Exporting Countries may decide next week to hike production.
In midday trade, New York’s main contract, light sweet crude for January delivery, was down 18 cents to 94.24 dollars a barrel.
Brent North Sea crude for January was up 25 cents at 92.77 dollars.
New York’s benchmark contract had climbed close to the historic level of 100 dollars last week, reaching a record high of 99.29 dollars on concerns over tight supplies.
“The crude oil price decline is being attributed to a combination of factors including market speculation of a big increase in output at next week’s OPEC meeting,” Barclays Capital analyst Kevin Norrish said.
Nuaimi, speaking early Wednesday, insisted the world oil market was well supplied and that high prices did not properly reflect the supply-demand situation.
“There is no relationship between the fundamentals today and the price of oil. There is a mismatch,” the Saudi told reporters after delivering a speech at an energy forum in Singapore.
“Fundamentals do not support high petroleum prices. The world market is well supplied,” he said in his speech.
Asked whether Saudi Arabia, the world’s biggest oil exporter, would push for an increase in production at the meeting in Abu Dhabi, Nuaimi said the cartel would first need to see data.
“You are trying to get a premature answer. We need to meet first, we need to look at the data and then decide accordingly,” he said.
Meanwhile OPEC president Mohammad al-Hamli on Wednesday announced that the oil cartel would invest more than 150 billion dollars (102 billion euros) by 2012 on more than 120 projects, including large refineries, to expand output.
The projects are expected to raise OPEC’s existing production capacity by more than five million barrels a day, said al-Hamli, who is also the oil minister of OPEC producer United Arab Emirates.
The market was meanwhile awaiting the latest snapshot of US energy inventories due Wednesday.
“Another move up toward the 100 dollars level should not be ruled out and today’s US inventory may prove to be a catalyst” should the data reveal a fall in stockpiles, said Norrish of Barclays Capital.