MercoPress. South Atlantic News Agency

Oil prices ease as OPEC begins talks to increase output replacing Libya

Sheikh Ahmad al-Abdullah al-Sabah, Kuwait’s oil minister

Oil dropped for a second day in New York as members of the Organization of Petroleum Exporting Countries considered talks about increasing production because violence is disrupting supplies from Libya.

Futures fell from a 29-month high yesterday after Kuwait’s oil minister said OPEC members are weighing an “urgent” meeting to determine whether more output is needed, as Libyan rebel fighters prepared an offensive to regain a town lost to Muammar Qaddafi’s forces. U.S. crude supplies rose the most since November last week, the American Petroleum Institute said.

Crude for April delivery decreased as much as 33 cents, or 0.3%, to $104.69 a barrel in electronic trading on the New York Mercantile Exchange. Nevertheless prices are up 29% from a year ago.

U.S. crude inventories climbed 3.8 million barrels last week to 348.5 million, the industry-funded American Petroleum Institute said.

Brent oil for April settlement slipped 1.98, or 1.7%, to end the session at $113.06 a barrel on the London- based ICE Futures Europe exchange yesterday.

Sheikh Ahmad al-Abdullah al-Sabah, Kuwait’s oil minister, told reporters that OPEC Secretary General Abdalla El Badri is contacting members to see whether a meeting on output levels is needed.

Violence in Libya, Africa’s third-largest crude producer, has cut output by as much as 1 million barrels a day, according to the International Energy Agency. Some OPEC members and producers outside the group have made up for the reduction in crude shipments from Libya, Qatari Energy Minister Mohammed Saleh al Sada said Monday.