oil prices


Oil prices fell further on Tuesday from record highs of almost 140 dollars that were hit a day earlier despite news of a likely output hike by Saudi Arabia.

New York's main oil futures contract, light sweet crude for July delivery, slipped 43 cents to 134.41 dollars per barrel in late afternoon European trading.

It had struck a record high of 139.89 dollars on Monday as fresh supply jitters overshadowed news that Saudi Arabia was ready to raise output to help cool high energy costs that threaten global economic growth.

"While prices traded softer in the morning (on Monday) following news that the Saudis are set to boost production, they received an impetus from the fire in one of Statoil's North Sea oilfields, which propelled oil to a record high of 139.89 per barrel," wrote Barclays Capital analysts.

Brent North Sea crude for August delivery fell 94 cents to 133.72 dollars on Tuesday, after setting a record high of 139.32 dollars the previous day.

"The worsening energy crisis may have reached a critical threshold," Bob Doll, a director at investment manager Blackrock, was quoted as saying by Dow Jones Newswires on Tuesday.

"And prices have risen enough to cause a deterioration in the overall global economic growth outlook."

Iran said Tuesday it would be opposed to any move by OPEC kingpin Saudi Arabia to raise its oil output without a consensus from fellow members of the oil cartel.

"If Saudi Arabia takes a measure to unilaterally increase (oil) output, it is a wrong move," Mohammad Ali Khatibi, Iran's new representative to the Organization of Petroleum Exporting Countries, was quoted as saying by the state television website.

In addition, Iranian President Mahmoud Ahmadinejad blamed soaring prices on the sliding dollar, which makes commodities priced in the dollar cheaper for foreign buyers and so tends to stimulate demand.

The comments came ahead of a meeting on Sunday organised by Saudi Arabia in the Red Sea city of Jeddah to bring together major oil producers and consumers to discuss prices.

UN Secretary General Ban said earlier that Saudi Arabian Oil Minister Ali al-Nuaimi plans to raise production by 200,000 barrels a day in July on top of an increase of 300,000 barrels made in June, while an announcement could come in Jeddah on Sunday.

Global leaders fear runaway oil prices pose a threat to economic growth as higher inflation leads central banks to raise interest rates.

OPEC, which pumps about 40 percent of oil supplies and has been widely blamed for the five-fold rise in prices since 2003, insists the oil market is well supplied.