Oil Falls to 19-Month Low on Saudi Rejection of More OPEC Cuts (Mark Shenk)

Created by : Francis Goodwin View profile

By Mark Shenk

Jan. 16, 2007 (Bloomberg) -- Crude oil fell to a 19-month low in New York after Saudi Arabia's oil minister rejected calls for more production cuts.

The Organization of Petroleum Exporting Countries must wait to assess the effect of a production cut starting on Feb. 1, the minister, Ali al-Naimi, told reporters in New Delhi. Saudi Arabia is OPEC's biggest and most influential member. Prices are down 14 percent this year, spurring Venezuela and Algeria to call for action before the next scheduled meeting on March 15.

``Crude oil has been down pretty sharply the last week and a half, leading some OPEC members to call for an emergency meeting and additional cuts,'' said Tom Bentz, an oil broker with BNP Paribas Inc. in New York. ``The Saudis say there is no need for further cuts, which has thrown cold water on the idea.''

Crude oil for February delivery fell $1.51, or 2.9 percent, to $51.48 a barrel at 12:10 p.m. on the New York Mercantile Exchange. Futures touched $51.15, the lowest since May 31, 2005. Prices are down 22 percent from a year ago. There was no floor trading in New York yesterday because of the Martin Luther King Jr. holiday.

Prices are down 34 percent from the record of $78.40 a barrel reached on July 14. The decline has accelerated during the past month because mild weather in the U.S. and Europe has curbed consumption of heating fuels.