Crude oil fell after a Saudi official said members of OPEC would make up for any supply disruptions should the US attack Iraq.
The official, who asked not to be identified, said top oil exporter Saudi Arabia and other OPEC members have a policy of ensuring adequate supply at all times. US President George W. Bush, a self-described "patient man," wants to oust Iraqi President Saddam Hussein. The Saudi government has said it won't allow the US to launch an invasion of Iraq from its territory.
The assurance, "coming from the Saudis, gives it more weight," said Phil Flynn, a senior energy trader at Alaron Trading Corp in Chicago. "They've gotten bad publicity in the US lately."
Crude oil for October delivery fell US$0.21, or 0.7 percent, to US$28.63 a barrel on the New York Mercantile Exchange. The contract was up US$0.12 for the week.
Oil has rallied 11 percent in the past two months partly on concern that Middle East exports might be stopped after a US attack.
"It's comforting that the Saudis say they will make up for Iraqi supply, but it may be beyond their control," said Bill O'Grady, director of fundamental futures research at AG Edwards & Sons Inc in St. Louis. "Prices wouldn't be up here on worries about the loss of Iraqi barrels alone."
In London, the October Brent crude-oil futures contract fell US$0.03 to US$26.99 a barrel on the International Petroleum Exchange.
Bush has said the overthrow of Hussein is necessary because the Iraqi leader may be developing nuclear, biological and chemical weapons.
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