Oil prices fall on calming comments from Saudi Arabia

Oil prices fall on calming comments from Saudi Arabia

Agence France-Presse London

World oil prices fell on Tuesday following comments from OPEC king in Saudi Arabia that it could increase output in the face of higher global demand, dealers said.

New York's main contract, light sweet crude for delivery in June, dropped 47 U.S.cents to US$54.10 per barrel in electronic deals.

In London, the price of Brent North Sea crude oil for delivery in June shed 25 U.S.cents, also to $54.10 per barrel.

After meeting U.S. President George W. Bush in Texas on Monday, Saudi Crown Prince Abdullah bin Abdul Aziz indicated the kingdom -- the biggest oil producer in the world -- could boost output further if needed.

"Saudi Arabia has some spare capacity that it can produce, should we be asked to produce that spare capacity by our customers," said Adel al-Jubeir, a senior foreign policy adviser to the prince.

Analysts said Jubeir's comments eased supply concerns after Saudi Arabian oil minister Ali al-Nuaimi said last on Thursday that his country was "not responsible for the price of oil in the market".

"Comments from Saudi Arabia indicating that they have plenty of spare capacity and are meeting customer demands at the moment has had an effect on oil prices over the last day or so," said Daniel Hynes, a commodity analyst with the ANZ Bank analyst in Melbourne, Australia.