Oil down a second day on economic concerns, Saudi pressure
By Robert Gibbons
NEW YORK (Reuters) - Oil futures fell for a second straight session on Tuesday, pressured by concerns about sputtering global economic growth and by indications that OPEC's top producer Saudi Arabia is working to drive down prices.
Crude futures extended the previous session's slide as investor focus shifted from the likely economic benefit of additional stimulus to the economic problems that prompted the U.S. Federal Reserve to launch its bond-buying program.
A senior Gulf source said Saudi Arabia is working to lower oil prices and is producing around 10 million barrels per day, putting additional pressure on oil prices.
The source also said most members of the Organization of the Petroleum Exporting Countries want oil prices around $100 per barrel and would boost production over the next few months.
"Unless there is a major supply disruption in the Middle East, there is nothing to push it higher," said analyst Andrey Kryuchenkov at VTB Capital. "Saudi will seek to drive it closer to $100 and everyone knows it."
Brent prices rose seven straight sessions before settling 2.4 percent lower on Monday, benefiting first from growing expectations that the Fed would act to bolster the economy, and subsequently from the actual launch of the stimulus program on Thursday after a two-day policy meeting.
Brent November crude fell $1.76 to settle at $112.03 a barrel. A combined 4.25 percent loss to start this week was the biggest two-day percentage drop since June 21, according to Reuters data.
Brent fell as low as $111.61, below the 200-day moving average of $111.87, a technical level tracked by traders. Continued...