Brent crude oil under more pressure as Saudi Arabia calls for lower prices

The price of Brent crude oil futures could fall further next week after new calls from Saudi Arabia’s oil minister for Brent oil prices to come back down to the $100 a barrel mark whilst a strong US dollar helps push the European oil contract lower.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2012 delivery ended Friday’s trading session at $112.04 a barrel on the ICE Futures Exchange, or 0.6 percent lower on the day.

Lower Oil Prices

Oil prices should fall because global supply is outweighing demand, according to Saudi Arabia’s oil minister, Ali al-Naimi.

“We want a lower price than where it is now. We need to get the price to a level of around $100 a barrel for London’s Brent crude.” al-Naimi said in Australia over the weekend.

Brent oil prices, a benchmark for more than half the world’s crude oil, have dropped 6 percent this month amid concern Europe’s debt crisis will worsen and curb fuel demand in the west.

Euro v Dollar

The euro slid to a 3-1/2-month low in volatile trade on Friday as political uncertainty in Greece spurred risk aversion.

The euro has dropped against the US dollar in eight of 10 sessions for a cumulative 2.4 percent decline, hit by the turmoil in Greece. Inconclusive election results last Sunday threw Greece into political disarray and raised the risk that it could exit both the euro zone and the EU.

Recent economic data has pointed to recession across Europe and could cause the ECB to take action sooner rather than later, compared with the United States, which is still seeing growth, although at a slower rate.

“I think those factors are all going to come together to lead to a further down leg in the euro. We would target something in the low to mid-1.20s over the next six to 12 months.” said Tom Higgins, global macro strategist at Standish Mellon Asset Management in Boston, which has assets under management of about $92 billion and is currently shorting the euro against the dollar.

A higher US dollar tends to weigh on commodity prices and Brent crude is priced in dollars.

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Brent crude oil under more pressure as Saudi Arabia calls for lower prices