Crude prices down on output moves

At mid-day in New York on Tuesday, crude oil prices were down.

West Texas Intermediate July contracts had lost 42 cents to $55.20 per barrel. The loss came after a rise in price of $2.11 on Monday.

On the International Petroleum Exchange, July Brent was down 70 cents to $54.08 per barrel, and August contracts had declined by 57 cents to $55.20 per barrel.

Crude oil fell on news that the president of OPEC had said that several OPEC officials had proposed a rise of 500,000 barrels per day in production quotas, to become effective immediately.

If OPEC ministers approve the quota increase at their Vienna meeting which begins tomorrow, it would put the quota at 28 million barrels per day. OPEC production is already above that level, as production has recently exceeded quotas.

Additionally, Nigeria has proposed that decisions on future production hikes should be left to the OPEC president.

Anticipation of the weekly US inventory figures also influenced prices. Inventories of crude oil are expected to remain around their current levels, a six-year high, while distillate stockpiles are expected to go up by 1.2 million barrels, and gasoline inventories are predicted to rise by 600,000 barrels.