Oil slips further as Saudis seen opening taps

Oil slips further as Saudis seen opening taps

LONDON (Reuters): Oil prices slipped again on Friday amid
mounting confidence that OPEC giant Saudi Arabia is quietly
pumping more crude to cool overheated energy markets.

North Sea Brent crude futures for September were down 26 cents
at US$28.01 a barrel after falling 61 cents on Thursday and 43
cents fall on Wednesday.

U.S. light crude was down 36 cents at $29.41.

Brent is now $1.78 or 6 percent down on the week as reports of
more tanker traffic and extra exports have convinced traders a
surge of new Saudi oil is heading for the market.

"There is a realization that extra Saudi barrels are out
there," said one broker. "This was especially brought home by the
tanker fixtures. That had a real impact on the market."

Crude's losses have also been spurred by a fall in U.S.
gasoline prices with the passing of the peak demand season in the
United States, the world's largest energy market.

Despite gasoline's fall U.S. authorities have voiced fresh
concern about the possible impact of high energy prices on the
world's most powerful economy.

Federal Reserve Chairman Alan Greenspan told lawmakers on
Thursday he was concerned about the rising prices and increased
demand for energy in the United States.

"I'm not worried as much on the issue of inflation because we
can contain that. I'm worried about the instability that (the
rising energy market) creates within the economy and the
difficulties that might emerge as a consequence," Greenspan said.

U.S. Energy Secretary Bill Richardson called on the
Organization of the Petroleum Exporting Countries to follow Saudi
Arabia's lead in signaling a supply increase.

"It is clear the world needs more oil," Richardson told
reporters after a Senate hearing on fuel prices.

Major oil companies said Saudi Arabia had called them on
Wednesday and Thursday with an offer of extra supply in a fresh
sign that the kingdom plans to make good on a two-week-old pledge
to up output by 500,000 barrels per day (bpd).

The Saudi move occurred despite mixed messages on output
policy from cartel members that has increased volatility on the
futures markets that set the price of world energy.

Venezuelan OPEC President Ali Rodriguez said Saudi Arabian Oil
Minister Ali al-Naimi had assured him again on Thursday that the
kingdom would not act alone in a move to lower oil prices.

Rodriguez told reporters in Caracas he had no information on
the reports that Saudi had already started leaking extra barrels
to clients.

However, tanker brokers said they had seen evidence of higher
Saudi exports in shipping fixtures.

"More oil is being shipped," said Sultan Riaz of Geneva- based
Marinav Shipping and Trading, who estimated July liftings from
the Middle East were due to total 35.5 million tons this month
from a previous peak this year of 34.5 million tons.

Saudi has said it would like to see prices subside to $25 a
barrel to prevent long-term damage to petroleum demand prospects
and to dampen inflationary pressures in the West.

There was minimal continued impact from word on Thursday that
Royal Dutch/Shell had shut in 80,000 bpd of Nigerian crude output
after a fire forced it to close down three flowstations in the
volatile Niger Delta.