By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Crude-oil futures stretched their losses in electronic trading during Asian hours Thursday, weighed by the possibility of a coordinated release of strategic reserves by some large industrialized nations and Saudi Arabia’s reassurance about supplies.
May crude-oil futures for May delivery CLK2 -0.24% slipped 6 cents to $105.35 a barrel on Globex.
The front-month contract fell $1.92 overnight on the New York Mercantile Exchange. The drop came after a French government spokesman said France, along with the U.S. and U.K., is consulting the International Energy Agency about the possibility of releasing oil reserves to curtail price increases.
High oil prices have been threatening to stall a fragile economic recovery in several countries around the world.
Meanwhile, Saudi Arabia’s oil minister, Ali Naimi, wrote in a Financial Times opinion piece on Thursday that the giant oil exporter “would like to see a lower price” and that geopolitical concerns, not inadequate supplies, are helping to keep prices high.
“Saudi Arabia has invested a great deal to sustain its capacity, and it will use spare production capacity to supply the oil market with any additional required volumes,” Naimi wrote in the article. “We have [reliably increased supplies] many times before, and we will do it again.”
Read the View From Jerusalem column on how the Saudis have failed to reverse oil-market trends.
Thursday’s drop in oil prices came against a backdrop of weaker Asian stock markets and a mild decline in U.S. index futures. The decline also ignores broad weakness in the U.S. dollar, usually a supporting factor for commodity prices. Read Asia Markets.
Dow Jones Industrial Average DJIA -0.54% futures were down 5 points at 13,048. Meantime, the ICE dollar index DXY -0.01% slipped to 79.03 from 79.253 late in North American trade Wednesday. Read Currencies report.
Elsewhere in the energy complex, the May contract for gasoline RBK2 +0.23% rose 0.2% to $3.37 a gallon and for heating-oil HOK2 -0.07% dropped 0.1% to $3.22 a gallon.
May natural-gas futures NGK12 -0.74% declined 0.5% to $2.27 per million British thermal units.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
