LONDON (AFP) — Crude oil prices pulled back Monday from last week's record highs as the dollar firmed against the euro and OPEC kingpin Saudi Arabia stressed its willingness to meet any increase in demand.
New York's main oil futures contract, light sweet crude for July delivery, slid 4.19 dollars a barrel to close at 134.35 dollars.
In London, Brent North Sea crude for July delivery dropped 3.78 dollars to settle at 133.91 dollars.
"The dollar's recovery is pressuring prices," said Eric Wittenauer, an analyst at Wachovia Securities.
The dollar gained on comments by US Treasury Secretary Henry Paulson who, when asked about a possible currency intervention to help prop up the declining dollar in a CNBC television interview, said: "I would never take intervention off the table or any policy tool off the table."
The euro dropped below 1.57 dollars after his remarks.
On Friday, the two benchmark crude oil futures contracts hit record all-time highs of 139.12 dollars in New York and 138.12 dollars in London.
The New York contract had its largest price jump on record -- 10.75 dollars -- to settle at 138.54 dollars.
"Friday's action was seemingly overdone and certainly unexpected. Nevertheless, playing the short side of the current market remains risky and traders should be prepared to take profits," Wittenauer said.
To put the unprecedented one-day gain in light sweet crude Friday in perspective, he noted that less than a decade ago a barrel was trading around 10 dollars a barrel.
Amid growing world pressure to cool oil prices that are stoking inflation and fueling unrest, Saudi Arabia on Monday called for talks with consumer nations on the problem and reiterated its readiness to meet any increase in demand.
At a meeting chaired by King Abdullah, the Saudi cabinet restated its view that the leap in prices was unjustified by fundamentals.
But it added that it had asked Oil Minister Ali al-Nuaimi to "convene a meeting soon of representatives of producer and consumer nations and firms operating in the production, export and trading of oil to discuss the jump in prices, its causes and how to deal with it objectively".
"Saudi Arabia ... has notified all oil companies with which it does business, as well as consumer nations, of its readiness to provide them with any additional quantities of oil they need," added the cabinet statement carried by the official SPA news agency.
Paulson welcomed Saudi Arabia's call for talks with consumer nations.
"It's got to be constructive. So I welcome it. I think that the solutions to the big problem are longer-term solutions in terms of investing in supply and alternative sources of energy," the US Treasury chief said in the CNBC interview.
"There's no doubt that oil prices where they are is a problem. There's nothing welcome about it, it's a real headwind. We're focused on it," he said.
Over the weekend, 11 nations that consume nearly two-thirds of the world's energy called for an urgent hike in global oil production.
Energy ministers from the Group of Eight industrialized nations met on Sunday in the northern Japanese city of Aomori with officials from China, India and South Korea. The 11 nations voiced "serious concerns" over the level of oil prices and said there was an "urgent need for increased and timely investment in the energy sector."
Copyright © 2010 AFP. All rights reserved. More »
