Oil prices fall on increased Opec output hopes

Oil prices have fallen on hopes that the Opec cartel of oil producers might be about to boost production for the first time in two years.

US light crude was down $1.61 at $103.84 a barrel, while Brent crude was down 85 cents at $114.19 a barrel.



US crude oil prices been near two-and-a-half year high amid fears Libya could be facing a full-blown civil war.

But remarks by Kuwait's oil minister that Opec is considering raising output seem to have soothed oil markets.

"We are in consultations about a potential output increase," said Sheikh Ahmad al-Abdullah al-Sabah.

But he added that there had been no decision over output quotas yet.

Mark Pervan, head of commodities research at ANZ in Melbourne, said: "There's no doubt the market is concerned about supply at the moment so any comments giving support to supply would be a trigger for profit-taking.


"I would still say the market is finely balanced and the news won't trigger a lot of selling in the near term."

There does not appear to be any consensus among Opec ministers about output levels.

Iran's Opec minister Mohammad Ali Khatibi told the Reuters news agency that there was "no shortage in the market" and "no need for further Opec supply".

He added: "But the consumers are worried, this is psychological."

Meanwhile, opposing forces - backing and rebelling against the rule of Muammar Gaddafi in Libya - are facing each other near oil terminals about 340 miles (550 km) east of Tripoli, rebels said.

The two sides have been skirmishing outside the oil town of Ras Lanuf.

from: bbc news