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Oil dips on supply fears
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July 20, 1999: 5:09 p.m. ET
Venezuelan official suggests more production if price of crude tops $22
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NEW YORK (CNNfn) - Oil prices slipped sharply Tuesday after the market was unnerved by suggestions that a key deal to limit global production could unravel.
The head of Venezuela's state oil company, Roberto Mandini, told a congressional hearing in Caracas that supply should be increased if the U.S. benchmark price for oil exceeds $22 a barrel.
U.S. trading followed the downward path set in European markets in the wake of Mandini's remarks. The light sweet crude oil contract for August delivery shed $1.04 to close at $19.40 a barrel in New York, a dip of 5.8 percent.
In London, the September Brent contract fell 64 cents a barrel to close at $18.56, at the lower end of the $18 to $20 trading range targeted by the Organization of Petroleum Countries.
The U.S. benchmark price last week breached $20 a barrel for the first time in 20 months, propelled by expectations that the production cuts agreed in May by OPEC would continue to be observed.
Traders said Mandini's remarks accounted for half of Tuesday's slump, with the balance coming from technical selling.
OPEC is due to meet in Vienna in September, but other member countries have said that boosting production is not being considered.
Saudi Arabia, the world's largest oil exporter, and Mexico sought to shore up confidence by insisting that they would maintain current production levels.
-- from staff and wire reports
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