Oil gained for a third day in New York, after a Saudi Arabia-based economist said the holder of the world’s biggest crude reserves cut production this month, signaling supply may shrink.
Futures climbed as much as 0.6 percent today, paring the week’s decline to 3.7 percent, after John Sfakianakis, chief economist at Riyadh-based Banque Saudi Fransi, said the kingdom reduced output by 300,000 barrels a day. Barclays Plc said the country may be lowering production of its lighter oil blends introduced in response to the slump from Libya. Prices also advanced yesterday after the U.S. dollar fell, increasing the appeal of raw materials.
“Reduced production of the country’s lighter blends in response to Libyan outages suggests supply may tighten,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today. “On the other hand, it could imply that demand is weak for Saudi light crude blends. The weaker U.S. dollar helped” prices, he said.
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