Oil drops as Saudis signal likely supply boost
Global oil prices fell on May 25 after top producer Saudi Arabia signaled a likely boost in supply as soon as the third quarter, and world stock markets were mixed over the sudden U.S. move to cancel the summit with North Korea.
Saudi oil minister Khaled al-Faleh said at an economic conference in Russia that a gradual output increase could happen in the second half of the year to prevent any supply shocks, according to the RIA Novosti agency.
Benchmark crude prices tumbled almost $3 per barrel in London and fell more than $2 in New York. Oil stocks were likewise hammered as a result, with U.S. supermajor Chevron falling 3.5 percent.
The weakened energy stocks weighed on Wall Street’s performance, with the Dow Jones Industrial Average and S&P 500 each lost 0.2 percent for the day.
Russia’s oil tsar Alexander Novak said ministers from OPEC and other members of the production pact would discuss how much to increase production next month.
“If we come to a common opinion that it is necessary” to increase supply it “should probably take place from the third quarter,” Novak said, according to RIA Novosti.
The lackluster finish in New York came amid light trading volume ahead of a three-day holiday weekend, the traditional start of the U.S. summer when many market players are on vacation.