Oil down despite Saudi comments

                  
                 Oil futures are trading slightly lower during Tuesday’s Asian even after a Saudi Arabian official said the kingdom is comfortable with prices of around $100 per barrel. 

On the New York Mercantile Exchange, light, sweet crude futures for May delivery fell 0.11% to USD94.70 per barrel in Asian trading Tuesday after settling up 0.48% at USD94.16 a barrel on Monday in the U.S. 

Oil futures got a boost Monday after euro zone finance ministers and the International Monetary Fund approved a EUR10 billion rescue package for Cyprus provided the country close up its second-largest lender, Laiki Bank. 

The deal guarantees deposits at Cypriot banks will be insured up to EUR100,000 and although the news is arguably positive, it sparked fears that future bailouts in the euro zone may call for bank restructurings. 

Also on Monday, Saudi Arabian Oil Minister Ali Al Naimi said prices of USD100 per barrel are reasonable for both consumers and producers. Kuwait echoed those comments. Both countries are members of the Organization of Petroleum Exporting Countries with Saudi Arabia being OPEC’s largest producer. 

Industry analysts expect Saudi Arabia to increase output next quarter to meet rising demand from China. China is the world’s second-largest oil consuming nation behind the U.S. 

While some OPEC nations such as Iran and Venezuela have previously favored higher prices, oil in the area of USD110 to USD120 per barrel for West Texas Intermediate can cause demand destruction and ripple effects throughout oil-consuming economies. 

Hani Hussein, Kuwaiti oil minister, confirmed his country is pumping about 2.9 million barrels per day this month. The comments were made at an energy conference in that country. 

Elsewhere, Brent futures for May delivery rose 0.21% to USD108.17 per barrel on the ICE Futures Exchange.
Courtesy : Investing.com