Such actions as Saudi Arabia's cut in oil output in March [by around
800,000 barrels from February due to weak demand], confirmed Sunday by oil
minister Ali al-Naimi, could result in a price spike, says a JPMorgan note.
Lackluster
demand for Saudi crude is a result of regional factors such as refinery
maintenance and Japanese outages, says the bank; it does not reflect the global
situation, and will result in increased tightness as refineries begin to come
back online going into summer.
"If supplies are not increased decisively
for June liftings, be prepared for price spikes over $130/bbl," it adds. ICE
June Brent down $1.41, or 1.1%, at $122.04/bbl. Nymex May light, sweet crude
down $1.92, or 1.7%, at $107.74/bbl.