New York - Oil prices slumped by more than $3 on Wednesday, with WTI crude below $92, on talk of increased Saudi Arabian supplies to help cool the market and a rise in US inventories, analysts said.
New York's main contract, West Texas Intermediate crude for delivery in October, shed $3.31 to close at $91.98 a barrel.
In London, Brent North Sea for November tumbled $3.84 to $108.19.
“Both the major crude oil contracts started the day a touch firmer as traders woke up to news that the Bank of Japan had joined the Federal Reserve and European Central Bank in announcing more monetary easing measures,” said Fawad Razaqzada, an analyst at GFT Markets trading group.
“However a sharp sell-off soon followed on talks that Saudi Arabia, the world's largest oil exporter, was planning to increase production to keep prices in check.”
The Saudi view that prices have pushed up too much was rekindled on Wednesday after the Financial Times said that the world's biggest oil exporter had been offering customers extra supplies.
“The main thing was that there have been reports from those 'unnamed sources' that the Saudis are going to attempt to push prices down,” said James Williams of WTRG Economics.
“That's getting some credibility.”
In addition, Williams said, an unexpected buildup in crude inventories in the US government's weekly petroleum supplies report also sent a bearish signal to the market.
“If you look at the world crude oil market, it is well supplied. On a current supply and demand basis, you couldn't even justify the current prices after the four dollar drop... You could easily argue for a crude oil in the $80 range,” he said. - Sapa-AFP