SINGAPORE: Oil edged down below $47 a barrel on Tuesday, as dealers mulled OPEC output options at a meeting this weekend and ahead of weekly US stocks data expected to show another fall in crude inventories.
OPEC’s largest member, Saudi Arabia, notified its Asian customers of largely steady cuts in supplies for April from March, traders said on Tuesday, a day after a Saudi-owned newspaper reported that the world’s top exporter wanted stricter compliance with existing curbs before considering more cuts.
U.S. light crude for April delivery fell 9 cents a barrel to $46.98 by 4:31 a.m. British time, having gained more than 3 percent on Monday, on OPEC’s hints of further cuts and after a naval incident between the United States and China.
London Brent crude was up 26 cents at $44.39 after settling 72 cents lower on Monday at $44.13.
“A lot of people were expecting Saudi Arabia to deepen the cuts ahead of the meeting. It looks like demand is going to fall further and OPEC will have to cut again,” said Tony Nunan, risk management manager at Tokyo-based Mitsubishi Corp.
Saudi Arabia planned to lower supplies to at least one European oil company in April, a trading source said on Monday.
OPEC will meet on Sunday to discuss more curbs to add to its current 4.2 million barrel per day (bpd) cuts agreed since September as oil prices have lost $100 from record highs over $147 a barrel hit in July as the economic crisis crimps demand.
OPEC Secretary-General Abdullah al-Badri said on Monday the 12-member producer group would consider reducing output again at the meeting. OPEC will slash its 2009 demand forecast by 1 million barrels per day (bpd) in a monthly report due on Friday, Badri also said.
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