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Oil prices fall after news of possible Saudi oilfield expansion

by September 2, 2016 General

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Singapore—Crude prices fell in Asia Monday following a report saying Saudi Arabia could maintain its total production capacity with the expansion of an oilfield, fuelling fresh concerns about the global supply glut. The losses come after a week of strong gains in the commodity that came on the back of hopes for the outlook of China’s economy and speculation about the resumption of talks on limiting output. Saudi Arabian Oil Co. will complete an expansion of its Shaybah oilfield by the end of May, allowing the world’s largest exporter to maintain total capacity at 12 million barrels a day, Bloomberg News reported.
The expansion will see Shaybah’s capacity rise from 750,000 barrels to 1 million barrels a day, the report said. At around 0330 GMT, US benchmark West Texas Intermediate (WTI) for delivery in June was down 61 cents, or 1.39 percent, at $43.12 and Brent crude for June dropped 50 cents, or 1.11 percent, to $44.61. The report caused “market jitters”, said Bernard Aw, an analyst with IG Markets in Singapore.—APP