Oil prices drop on reassuring Saudi comments

World oil prices dropped almost a dollar Tuesday on reassuring comments from Opec kingpin Saudi Arabia that it might increase output should demand rise further, following high-level talks over the soaring cost of oil.

New York’s main contract, light sweet crude for delivery in June, dropped 89 cents to 53.68 dollars per barrel in electronic deals.

In London, the price of Brent North Sea crude oil for delivery in June shed 90 cents, also to 53.50 dollars per barrel.

US President George W Bush held talks Monday with Saudi Arabian crown Prince Abdullah Bin Abdul Aziz at his Crawford Ranch in Texas, focusing on surging oil prices.

After the meeting the prince indicated that his kingdom — the biggest oil producer in the world – could boost output further if needed.

“Saudi Arabia has some spare capacity that it can produce, should we be asked to produce that spare capacity by our customers,” said Adel al-Jubeir, a senior foreign policy adviser to the Prince.

Today’s drop in prices was “just follow through” from yesterday’s volatile trading, said Investec analyst Bruce Evers, adding:

“A little of a correction was probably not unexpected. People are speculating that Bush has asked Prince Abdel Aziz to increase production and get the oil price down.”