LONDON (Reuters) - Crude oil futures fell on Friday, paring earlier gains after Brent rose to a five-week high of $120 a barrel, as Saudi Arabia began offering more oil to Asian refiners, easing worries about supplies following an inconclusive OPEC meeting.
Top oil exporter Saudi Arabia is offering more crude to Asian refiners in July, industry sources with direct knowledge of negotiations said on Friday, the first evidence it is taking steps to unilaterally increase supplies.
ICE Brent for July delivery was 1 cent up at $119.58 a barrel at 4:55 a.m. EDT, having risen to a high of $120.07 earlier, the highest since May 5. The contract pared gains following a strong rally over the course of the week.
U.S. crude also reversed early gains to trade down 36 cents at $101.57 a barrel.
"I would expect people to start to digest what happened during the meeting: it means OPEC has no longer a quota, no restraint on production and Saudi Arabia is doing that, offering more to Asian customers. This element today should lead to some pressure on prices," Christophe Barret from Credit Agricole CIB said.
OPEC met on Wednesday and for the first time in about a decade failed to agree on output policy.
Numbers compiled at the OPEC headquarters in Vienna had implied the market needed around 2 million barrels per day (bpd) more oil for the third quarter of this year and 1.5 million bpd for the fourth quarter, OPEC Secretary General Abdullah al-Badri told a World Economic Forum conference.
"Today we're seeing a normalization, it's back to reality," Commerzbank analyst Carsten Fritsch said.
