Oil down in Asia on fears of higher supply

Singapore, Jun 7: Oil was down in Asian trade today (June 7) amid speculation that OPEC may boost crude supplies despite faltering energy demand, analysts said.

New York's main contract, light sweet crude for July delivery, lost 52 cents to USD 98.49 a barrel and Brent North Sea crude for July delivery dipped 41 cents to USD 114.07.

"Today the focus will still be on the OPEC meeting, as other countries including Saudi Arabia want to hike production and keep prices lower," said Ker Chung Yang, a commodity analyst at Phillip Futures in Singapore.

"Only Iran and Venezuela may not want to hike production and want to keep prices higher," he added.

The 12-nation Organisation of the Petroleum Exporting Countries (OPEC) oil cartel will meet on Wednesday in Vienna amid growing fears that high crude prices could further dent world economic growth and energy demand. The oil cartel pumps about 40 per cent of global supply.

Most analysts expected the cartel would leave production quotas unchanged despite a surge in crude oil prices spurred by unrest in the Arab world, particularly in Libya.

Iran, OPEC's second-biggest crude producer, favours high oil prices and traditionally opposes an increase in production of the cartel.

Tehran's OPEC representative said yesterday that the Islamic republic was against any increase in OPEC output.

"There is no need to increase production of OPEC countries at the 159th meeting of the organisation," Mohammad Ali Khatibi was quoted as saying on state television.

AFP