LONDON - Oil prices fell sharply yesterday, with Brent crude dropping more than US$2 a barrel after Kuwait's Oil Minister said OPEC was considering boosting production for the first time in more than two years.
The Organisation of the Petroleum Exporting Countries has yet to change its production policy officially, even though it has been boosting supply informally for months and Saudi Arabia has offered to help make up for the loss of around two-thirds of Libya's output.
An official increase in OPEC output would signal the group's determination to put a cap on prices after uprisings and unrest across North Africa and the Middle East sent oil to its highest in more than two and a half years.
Fighting in Libya has idled around 1 million barrels per day (bpd), with the key Libyan oil ports of Ras Lanuf and Brega in the east of the country closed, and consumers have been looking for a response from OPEC.
At one point, US light crude futures were US$1.45 lower at US$103.99. Brent crude dropped to a low of US$112.23 per barrel, down US$2.81, by midnight (Singapore time). On Feb 24, Brent hit US$119.79, its highest since 2008, when it reached an all-time high of US$147.50.