NEW YORK (CNNfn) - Crude oil prices ended lower Wednesday amid reports that Saudi Arabia was quietly leaking extra barrels to the market despite OPEC's decision to drop a widely expected July output hike.|
U.S. light sweet crude futures for September delivery settled at $30.35 per barrel, down 29 cents on the New York Mercantile Exchange. London's benchmark Brent for September delivery settled at $28.89 per barrel, down 43 cents.
Industry sources told Reuters that Saudi Arabia, the world's biggest exporter, was making good on a two-week-old pledge to boost output by 500,000 barrels per day (bpd).
The report comes on the heels of OPEC President Ali Rodriguez's statement Tuesday that the cartel no longer needed to lift supplies because prices had fallen below a $28 threshold for more barrels.
Saudi said earlier this month it was prepared to lift supplies alone by half a million bpd to stop this year's relentless price rally, which has seen oil stubbornly stuck around $30.
The sources said that Riyadh already had opened its valves by 250,000 bpd and would double the extra volumes in August. Under an OPEC agreement, the release of 500,000 bpd of group production is triggered if prices move above $28 per barrel range for the reference basket for 20 consecutive business days.
The basket price had been above the upper limit of the target range for 10 days before Rodriguez put OPEC members on stand-by to boost output by 500,000 bpd, an amount that was to be shared by all members on a pro rata basis.
Rodriguez said Wednesday that Tuesday's basket price returned to $28.09, which according to the mechanism agreement would again set the 20-day clock ticking.
Analysts had doubted that Saudi Arabia would shelve plans to raise output and fall in line with its OPEC collegues. Riyadh has repeatedly said that it would work to bring prices down to $25. Rodriguez insisted Wednesday that he had received Saudi assurances that the cartel powerhouse would not go it alone on an output increase.
"The information I have, according to the only credible source -- Saudi Arabian Oil Minister (Ali) al-Naimi -- is that they will not take any unilateral action," Rodriguez told reporters after meeting OPEC Secretary-General Rilwanu Lukman in Caracas, Venezuela.
Lukman stressed that the cartel was committed to the price band mechanism and was ready to jack up production if prices stayed high.
--compiled from staff and wire reports