Oil prices fell more than $2 a barrel below $92 on Tuesday after the U.S. government reported a decline in retail sales and Saudi Arabia's oil minister said the Organization of Petroleum Exporting Countries could increase output.
According to the U.S. Commerce Department today, U.S. retail sales fell 0.4 percent in December, the first decline since June 2007. In the Middle East, Saudi Arabia's oil minister Ali al-Naimi said OPEC could increase oil production if the market justifies that need.
Crude oil fell $3.04 or 3.23 percent to $91.16 a barrel on the New York Mercantile Exchange at 1:37 p.m. Brent crude fell $2.11 or 2.28 percent to $90.55 on London's ICE Futures Exchange.
Earlier today, President Bush said on his visit to the Middle East that when consumers have less purchasing power, it could cause the economy to slow down.
I hope OPEC nations put more supply on the market, he said. It would be helpful.
Saudi Arabia's minister commented in response to President's Bush speech that OPEC's policy considers increasing production when the market justifies it.
I'm sure no one will look with pleasure on a recession in the U.S., al-Naimi said. On the contrary, all our effort is to maintain prosperity and growth in all countries particularly the number one consuming nation in the world.
However, Saudi Arabia's minister stressed that oil is not the only reason to cause U.S. economy slow down.
The concern for the U.S. economy is valid, but what affects the U.S. economy is more than the supply of oil, he said.
Saudi Arabia is the biggest producer in the Organization for Petroleum Exporting Countries who will meet on February 1 to take a decision on OPEC's oil output. The members of this organization are responsible for about 40 percent of world oil supply.
In a separate report, the Commerce Department said today that gasoline prices dropped 1.7 percent in December.