* U.S. crude falls to $111.18; Brent drops to $122.78
* Aramco CEO says not comfortable with current oil prices
* Investors reduce risk ahead of Fed meeting -analyst
* Coming up: U.S. consumer confidence for April; 1400 GMT
(Adds analyst's comments, updates prices)
By Manash Goswami and Florence Tan
SINGAPORE, April 26 (Reuters) - U.S. crude futures fell more
than $1 on Tuesday as investors reduced risk ahead of a meeting
of the U.S. Federal Reserve and after Saudi Aramco's chief
executive said the kingdom was not comfortable with current oil
prices.
NYMEX crude for June delivery <CLc1> declined as much as
$1.08 a barrel to $111.2, and traded at $111.28 a barrel by 0242
GMT. Brent <LCOc1> dropped 66 cents to $123 a barrel.
"We are not comfortable with oil prices where they are
today...I am concerned about the impact it could have on the
global economy," Aramco's chief executive, Khalid al-Falih, told
an industry gathering in Seoul.
Crude snapped three days of gains, sliding along with silver
and gold, as investors were uncertain whether the U.S. Federal
Reserve would signal a change in its easy monetary policy after
a two-day meeting of policymakers wraps up on Wednesday.
"There is some risk reduction because the market wants to
watch if Bernanke will say anything about a change of stance,"
Tetsu Emori, a Tokyo-based commodities fund manager at Astmax
Investments, said. "Any change of stance is highly unlikely."
Market participants will look to the post-meeting news
conference by Fed Chairman Ben Bernanke on Wednesday -- the
first regularly scheduled news briefing by a Fed chief in the
U.S. central bank's 97-year history -- to see how the Fed plans
to exit from its ultra-loose policy.
"The market is displaying a cautious stance as any signs of
the Fed tightening dollar supply would reduce crude gains," said
Serene Lim, an analyst at ANZ. "There isn't a lot of fresh
development in the Middle East and Libya which is providing a
floor to prices."
Saudi Arabia has enough spare crude capacity to meet demand
as oil prices extend a gain above $120 per barrel, Falih said,
adding that he didn't see any tightness in global oil supply.
[]
"They should be happy with the increases, but what Saudi
Arabia is looking for is stability in prices," Emori said.
"Anything outside of a range of $90-$110 makes them
uncomfortable."
MIDDLE EAST
Oil has strengthened in the past few months as protests in
Libya spread to other countries in the Middle East and North
Africa such as Syria and Yemen, boosting fears of further supply
disruptions from the region at a time when demand from key
consumers such as China and India continues to rise.
Security forces have arrested about 500 pro-democracy
sympathisers across Syria after the government sent tanks to try
to crush protests in the city of Deraa, the Syrian rights
organisation Sawasiah said on Tuesday.
The independent organisation said it had received reports
that at least 20 people had been killed in Deraa since tanks
moved in on Monday. []
Italy, which has been playing a limited role in NATO
operations in Libya, decided on Monday its air force would be
allowed to bomb selected military targets in the former Italian
colony. []
Refugees fleeing Libya's Western Mountains told of heavy
bombardment by leader Muammar Gaddafi's forces as they try to
dislodge rebels in remote Berber towns. The capture of the
Dehiba-Wazin crossing on the Tunisian border by rebels last week
has let refugees flee in cars or on foot along rocky paths,
swelling the numbers of Libyans sheltering in southern Tunisia
to an estimated 30,000 people. []
(Editing by Clarence Fernandez)
