Oil slips on Greek worries, Saudi call for lower prices

Singapore – Oil fell in Asian trade Monday amid mounting worries over Europe’s debt crisis and calls by major crude producer Saudi Arabia for prices to fall further, analysts said.

New York’s main contract West Texas Intermediate crude for delivery in June was down 84 cents to $95.29 per barrel while Brent North Sea crude for June shed 41 cents to $111.85 in morning trade.

Debt-laden Greece’s political crisis is at the centre of investors’ thoughts after emergency talks between party leaders failed to forge a unity cabinet, making the prospect of new elections increasingly likely.

“As always with Greece it’s not about one peripheral European economy but the widespread contagion on fellow members,” said Justin Harper, market strategist at IG Markets Singapore.

“Spain, Italy and Portugal are also sources of constant concern,” he added.

Market sentiment was also weighed down by a Saudi call for crude prices to fall further.

“We need to get prices at a level around $100. Now, it is still high,” Saudi oil minister Ali al-Naimi was quoted as saying on Sunday by Dow Jones Newswires.

He was referring directly to Brent crude, the most widely traded oil contract worldwide.

Speaking to reporters in Australia, al-Naimi added that global crude stocks were likely to increase ahead of an anticipated seasonal rebound in demand starting from July.

“It is very important to recognise that supply today is 1.3 million to 1.5 million barrels per day over demand, which is good. It is going into inventory and bringing inventory up — that should give comfort to consuming countries,” al-Naimi said.