Oil Prices UP Again

Wednesday oil prices increase more than $1, after Saudi Arabia said that the market had now reached a fair value.

Saudi Oil Minister Ali al-Naimi said, "I believe the current prices are fair and there is no reason to take any measures either to decrease or increase the production."

Also, The US Energy Department reported that U.S. oil inventories fell as refineries increased production of gasoline and other fuels.

Supplies declined 500,000 barrels to 304.9 million in the week ended Friday. Analysts expected a 1 million-barrel gain. U.S. refiners operated at 96.1 percent of capacity, up 0.5 percentage point from the week before, as they made gasoline to meet rising summer demand. Oil prices fell close to a three-month low yesterday on increasing output by OPEC.

US light crude was up $1.39 to US$37.05 a barrel, while London Brent rose also by US$1.39 to US$34.50 a barrel.
Saudi Arabia has been producing 9.1 million barrels a day since the start of June.

Gains accelerated after the US government reported a small 500,000 barrels fall in commercial crude stocks last week. US crude stocks had increased in 17 of the previous 21 weeks and analysts had expected another two million barrel rise.

There are concerns that prices may quickly rise again because of attacks on major oil facilities in the MiddleEast, as the higher Saudi supply has reduced the worlds spare production capacity.