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 Oil Minister Ali al-Naimi said he hoped and expected the oil market
to balance and prices, which hit a nearly six-year low around $45 in
January, to stabilize, adding to signs OPEC's largest exporter is
confident that demand is growing.
"I hope and expect supply and demand to balance and for prices to
stabilize," Naimi said in a speech in Berlin. "Global economic
growth seems more robust."
OPEC decided not to cut output last year and let prices fall as it
moved to defend its share of the market against fast-growing U.S.
shale output. Naimi said it was not Saudi Arabia's responsibility to
"subsidize" higher cost oil producers.
The speech followed news that Saudi Arabia had raised its official
selling prices (OSPs) for oil deliveries to Asia and the United
States on Tuesday.
"This is a sign that prices have bottomed out because it means Saudi
is confident in raising prices without being afraid of losing market
share," said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo.
April Brent was down 42 cents at $60.60 by 7 a.m. ET, after rising
2.5 percent on Tuesday. U.S. crude futures <CLc1> were up 23 cents
to $50.75 a barrel, narrowing their discount to Brent to less than
$10 a barrel.
Air strikes on oil terminals in Libya on Tuesday helped to underpin
prices, further threatening supplies from the OPEC member that have
been slashed by ongoing fighting across the country.
Islamist militants, who have gained ground during the turmoil, on
Tuesday took over Libya's Bahi oil station and the Mabrouk oilfield,
after forces guarding the installations, from which staff have
already left, were forced to retreat.
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However, uncertainty about talks between major powers and Iran over
its nuclear program capped oil's gains.
Any sign of a lasting agreement between Tehran and six world powers,
the so-called P5+1 group, could result in a flood of Iranian crude.
Traders were also looking to weekly U.S. government inventories data
due on Wednesday to provide direction. An industry report showed a
smaller than expected build-up in U.S. commercial crude stocks last
week.
(Additional reporting by Florence Tan in Singapore; editing by
Christopher Johnson and Jason Neely)
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