Oil falls following Abdullah reports

Investing.com - Oil futures traded lower in the early part of Tuesday’s Asian session amid conflicting reports regarding the health of Saudi Arabian King Abdullah.

On the New York Mercantile Exchange, light, sweet crude futures for July delivery 0.52% to USD93.66 per barrel in Asian trading. Trade was light as markets in the U.S. and U.K. were closed Monday for holidays.

On Monday, one media report said Saudi Arabia’s King Abdullah bin Abdulaziz may be clinically dead, because the king has not been seen in public recently. Citing a source, the media outlet said the king may have been clinically dead dating back to last Wednesday and that the king’s vital organs, including his heart, kidneys and lungs, have stopped working.

Indicating those reports were inaccurate, King Abdullah chaired a cabinet meeting Monday. Still, reports have surfaced over the past few years about the King’s health. Saudi Arabia is the largest producer in the Organization of Petroleum Exporting Countries.

OPEC meets Friday in Vienna and increased U.S. oil production is expected to be a hot topic. The U.S. is producing more oil than at any time in the previous several decades, helping lower its dependence on foreign crude.

African oil producers have been most affected by increased U.S. output. For example, Nigeria and Angola, the continent’s two largest producers, are home to oil that is similar in quality to what is found in the U.S.

The 12 OPEC member states account for about 40% of global oil exports.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for June delivery shed 0.10% to trade at USD102.54 a barrel, with the spread between the Brent and crude contracts standing at about USD9 a barrel.

The gap between the contracts narrowed to the lowest level since January 2011 earlier in the month, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.