Oil Falls as Naimi Says OPEC’s Output Growth May Outpace Demand

Crude oil fell for a second day in New York after Ali al-Naimi, Saudi Arabia’s oil minister, said there’s a risk OPEC’s capacity expansions may outpace demand.

The Organization of Petroleum Exporting Countries mustn’t take forecasts about “strong” oil demand growth as “solid,” Naimi said in Amman, Jordan yesterday. Record prices are curbing sales in regions such as Southeast Asia, the International Energy Agency said May 12, trimming its 2006 forecast for global demand growth to 1.5 percent from 1.8 percent.

“You’d have to expect that these high prices are going to have an impact on demand,” said David Thurtell, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “And it looks like supplies are picking up out of OPEC.”

Bloomberg