* Industry executives concur with OPEC, see no shortages
* Saudis say hold 3.5 million bpd of spare output capacity
* Coming Up: U.S. EIA weekly inventory report; 1530 GMT
(Adds graphic on WTI/Brent spread, OECD inventories)
By Alejandro Barbajosa
SINGAPORE, March 9 (Reuters) - Brent crude dropped for a
third day, dipping below $113 on Wednesday, after reassurances
from OPEC members of ample spare capacity eased anxiety about
export losses from Libya, Africa's third-largest oil producer.
Libyan tanks and warplanes intensified their offensive
against rebels on Tuesday aiming to recover lost territory,
while world powers considered a no-fly zone over the country.
"The premium added to Brent has been pared and it is
possible that it will keep narrowing further because of some
easing of Libya's tensions and thanks to the unwinding of
positions on the WTI/Brent spread," said Ken Hasegawa, a
commodity derivatives manager at Japan's Newedge brokerage.
Brent crude for April declined 49 cents to $112.57 a
barrel at 0424 GMT, more than $7 below a 2-1/2 year high of
almost $120 reached on Feb. 24.
"There is still a lot of uncertainty in the Middle East and
North Africa by which the market will be supported," Hasegawa
said, but added Brent prices could first fall towards $110.
The European benchmark cut its premium to U.S. crude by more
than half in a week from a record of $17.
For a graphic: http://graphics.thomsonreuters.com/AS/1/ABE_20110903122006.jpg
U.S. benchmark West Texas Intermediate was trading
about $8.00 below Brent on Wednesday, down 66 cents at $104.36,
having settled at a 2-1/2 year high above $105 on Monday.
The Organization of the Petroleum Exporting Countries is in
talks about officially boosting crude supplies, Kuwait's oil
minister said on Tuesday, but some in the group were reluctant
to open the taps, saying world supply remains comfortable.
But fears of a supply squeeze have eased in the past few
days on news that top oil exporter Saudi Arabia is pumping about
9 million barrels per day (bpd), exceeding its OPEC quota by
almost 1 million bpd, roughly the same as the lost Libyan
output. That is in line with a U.S. Energy Information
Administration (EIA) estimate released on Tuesday.
SAUDI SUPPLY
OPEC top producer Saudi Arabia said on Tuesday it has ample
spare capacity to boost supplies to the market if needed.
"The kingdom has 3.5 million bpd of spare capacity which
could help compensate for any shortages," oil minister Ali
al-Naimi said in remarks carried by Saudi state news agency SPA.
Top executives from some of the world's biggest energy
companies, including French major Total SA and U.S.-based Hess
Corp, on Tuesday said global oil supply is plentiful in spite of
Libyan supply disruptions, and urged U.S. policymakers not to
tap strategic oil stockpiles.
U.S. crude inventories climbed a larger-than-expected 3.8
million barrels in the week to March 4, industry group the
American Petroleum Institute (API) said on Wednesday, ahead of
EIA statistics due on Wednesday at 1530 GMT.
Total petroleum inventories for the Organization for
Economic Cooperation and Development nations (OECD) are
projected to fall to the equivalent of 55 days of consumption by
the end of 2012 from 57 days in December 2010, near the middle
of the previous five-year range, the EIA said in its short-term
energy outlook published on Tuesday.
(Editing by Ramthan Hussain)
