June 16 (Bloomberg) -- Crude oil fell from a record on signs that Saudi Arabia will increase production to stabilize prices.
The kingdom will produce 9.7 million barrels of oil a day next month, an increase of 200,000 barrels from June's level, King Abdullah told United Nations Secretary-General Ban Ki-Moon, according to a UN spokesman. Prices earlier climbed to a record $139.89 after a fire cut North Sea output and the dollar declined against the euro, bolstering the appeal of commodities.
``The possible Saudi production increase and the North Sea fire don't warrant a price swing of more than $5,'' said Gene McGillian, an analyst at TFS Energy LLC in Stamford, Connecticut. ``We weren't able to get to $140, then fell to little changed, and suddenly without a warning prices were more than $1 lower. This market is being whipped around.''
Crude oil for July delivery fell 87 cents, or 0.6 percent, to $134.24 a barrel at 2:07 p.m. on the New York Mercantile Exchange. Prices are up 97 percent from a year ago.
``When you put in a new record and fail to see any follow- through, it suggests that there is some underlying weakness in the market,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York.
Brent crude oil for August settlement declined 93 cents, or 0.7 percent, to $134.11 a barrel on London's ICE Futures Europe exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
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