LONDON, Feb 8 (AFP) - World oil prices fell on Tuesday as warmer weather in key markets continued to ease demand for heating fuel, while traders digested news that Saudi Arabia expects to increase its oil production capacity by nearly 15 percent within the next four years.
New York's main contract, light sweet crude for delivery in March fell 25 cents to 45.03 dollars a barrel in electronic deals.
In London, the price of Brent North Sea crude oil for delivery in March dropped 30 cents to 42.73 dollars a barrel.
"Fundamentals are currently in place for the market to head lower, with product stocks ample, US refiners in maintenance before they start moving production into gasoline for the driving season, warmer than average weather in North Western Europe, the US and Asia and OPEC unlikely to cut production," analysts for the Sucden brokerage firm said.
Oil kingpin and OPEC member Saudi Arabia said that it expected to increase its oil output capacity to 12.5 million barrels per day (bpd) within the next four years, from 11 million currently, and has considered raising it to 15 million if world demand warrants such a move, Oil Minister Ali al-Nuaimi said Tuesday.
"Saudi Arabia plans to increase its production capacity to 12.5 million bpd within the next four years," Nuaimi told reporters attending a Saudi-hosted counter-terrorism conference.
Nuaimi said that Saudi Arabia was currently producing nine million bpd and said it would continue to do so until further notice.
The kingdom sits on 261 billion barrels of oil reserves, a quarter of the global total.
Informa Global Markets analyst Peter Luxton meanwhile said that the Organisation of Petroleum Exporting Countries remained very worried that too much oil might be available in the second quarter.
"If prices fall too rapidly, or indeed if global inventories rise too quickly, OPEC may soon change its tune and start talking about cutting production again," he added.
Elsewhere, traders were looking ahead to the latest weekly snapshot of US crude oil inventory data, to be published on Wednesday.
With the northern hemisphere winter nearing its end, markets are switching their attention away from US stockpiles of heating fuel towards gasoline, or petrol, as Americans gear up for the so-called 'driving season' when motorists hit the roads for their vacations beginning in May.
02/08/2005 12:25 GMT - AFP