World oil prices slid today as Saudi Oil Minister Ali Naimi said the amount of crude available on the world market was 'very adequate' amid fears the Libya crisis could cause a supply shortage.
New York's main contract, light sweet crude for delivery in April, shed $1.12 to $104.32 a barrel, one day after soaring to $106.95 - the highest level for two and a half years. In late evening trade, Brent North Sea crude for April was down $2.23 to $112.81.
Naimi told Saudi Arabia's state SPA news agency: 'Current supplies in the market are very adequate, and there is an extra output capacity that could be used if needed'.
'Recent crude prices do not reflect the fundamentals of supply and demand in the oil market as much as they are caused by financial speculation and a negative and unrealistic take on supplies,' he said.
Naimi added that Saudi Arabia had an extra output capacity of 3.5 million barrels a day 'which could be used and help in covering any shortage'.
Members of the Organisation of Petroleum Exporting Countries (OPEC) are holding consultations over the oil market in light of the Libyan turmoil, the Kuwaiti oil minister said today.
'We are in consultation but have not yet decided which direction' we are heading, Sheikh Ahmad Abdullah al-Sabah told reporters when asked if OPEC was discussing whether to raise crude production.
He also denied that Kuwait, OPEC's fifth largest producer, had increased output. The OPEC cartel pumps about 40% of the world's oil.
Crude oil prices had jumped yesterday as traders fretted about escalating clashes in Libya between forces loyal to Kadhafi and rebels seeking to end his four-decade rule.
Oil prices also weakened today as the US refused to rule out tapping its oil reserves to tackle high oil prices. White House chief of staff William Daley said on Sunday that the US had not ruled out tapping its strategic oil reserves to help dampen the higher cost of oil.
