Brent hits 6-week low as Saudi plans to check prices

19 September 2012, Sweetcrude, LONDON – UK’s Brent crude oil futures plunged to a six-week low on Wednesday, as the market absorbed comments from Saudi Arabia that it would take action to keep prices in check. This, in turn, raised expectations of increased supply.

Oil fell further after weekly data from the Energy Information Administration, EIA, showed crude stocks in the US climbing 8.5 million barrels – far more than expected.

On Tuesday an OPEC Gulf source said Saudi Arabia – the world’s largest oil exporter – was pumping around 10 million barrels per day, bpd, and working to keep oil prices down.

Brent November crude fell $3.05 to $108.98 a barrel by 1454 GMT. It touched its lowest since 7 August and is down 5.6% this week.US October crude was down $2.84 at $92.45 a barrel. The contract expires on Thursday.

Oil markets are sufficiently supplied, OPEC’s secretary general Abdullah al-Badri said on Wednesday, maintaining the Organisation of the Petroleum Exporting Countries’ view that supply is enough despite high prices that are worrying consumer countries.

Market participants said earlier that worries about the perilous state of Spain’s finances had snuffed out gains made by oil prices after Japan’s central bank became the latest to further open its monetary taps.

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