* Saudi cuts output, believes market is well-supplied
* Finnish vote, Greek debt rumours rattle euro
* Citigroup Q1 profits down 32 pct
(Updates prices, adds Citigroup)
By Claire Milhench
LONDON, April 18 (Reuters) - Oil prices fell more than $2 a
barrel on Monday to under $122 a barrel after top exporter Saudi
Arabia said it had cut output because it lacked buyers, and the
dollar strengthened against the euro on eurozone debt fears.
The kingdom reduced output by 800,000 barrels per day (bpd)
to 8.292 million bpd in March from February, Saudi Oil Minister
Ali al-Naimi said on Sunday, describing the market as
"oversupplied." []
Kuwait's oil minister on Monday added that high oil prices
could form a significant economic burden for many
import-dependent countries. []
Brent crude <LCOc1> was down $1.59 cents at $121.89 a barrel
by 1228 GMT after earlier falling over $2 to an intraday low of
$121.40. U.S. crude <CLc1> slipped $1.58 to $108.08, having
traded as low as $107.78 a barrel.
Carsten Fritsch, an analyst at Commerzbank in Frankfurt,
said the market was down in reaction to the Saudi statement.
"They said they made the cut because of over-supply and weak
demand. That should further the discussion as to whether high
oil prices are starting to dampen oil demand," Fritsch said.
On Monday, Naimi warned of continued weakness in the global
economy. "The recovery remains patchy," he said.
Oil prices fell early last week on concerns that demand is
eroding under pressure from high prices, but rebounded on Friday
following encouraging U.S. economic data.
Christopher Bellew, am oil trader at Bache Commodities in
London, cautioned against reading too much into Monday's price
dip. "I'd be surprised if prices weren't quite a bit higher by
Thursday night (ahead of the Easter weekend)," he said.
Michael Hewson, an analyst at CMC Markets, also thought the
price fall was just a blip. "We did have a significant move
upwards on Friday so some sort of pull-back is fairly normal."
Hewson detected a change in tone in the Saudi statement
compared with previous announcements, and argued that it should
in fact prove supportive, helping to put a floor under oil
prices at a higher level.
"There are some concerns about unrest in the Middle East and
given the fact that they've just bunged $35 billion at their
population, it suggests they need a higher oil price to generate
the revenues to offset that," he said.
In Libya, forces loyal to Muammar Gaddafi bombarded Misrata
with rockets and artillery and pounded the insurgents' eastern
frontline outpost of Ajdabiyah, rebels said. []
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More on Middle East unrest: [] []
Interactive graphic http://link.reuters.com/puk87r
Graphic on recessions and the oil price:
http://r.reuters.com/vyx88r
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The oil market is still seeking a close replacement for very
high quality Libyan sweet crude oil lost due to the conflict in
the North African nation, OPEC Secretary General Abdullah
Al-Badri said on Monday. []
Unrest continues in Syria and Yemen [].
EURO BAILOUT FEARS
The dollar strengthened against the euro after Finnish
voters handed the anti-euro party True Finns a crucial role in
parliament and Greece was forced to deny a report that it had
sought to restructure its debt. [] []
A stronger dollar <.DXY> makes oil more expensive for buyers
using other currencies.
The True Finns have said they will oppose a bailout for
Portugal, and Finland requires parliamentary approval to
participate in any bailout package. []
"It shows rising resistance in countries that are supposed
to give the money," said Fritsch.
CMC's Hewson said that on the flip side, inflationary
concerns are limiting price rises: "China raised its bank
reserve requirement ratios for the fourth time this year at the
weekend and the rhetoric from the governor of the People's Bank
of China was slightly more hawkish."
Markets are also looking to corporate earnings this week.
Citigroup reported a 32 percent fall in profit in the first
quarter on weak revenues. []
Eurozone consumer confidence figures for April, which should
have come on Monday, have been delayed until April 19, the
European Commission said.
(Additional reporting by Francis Kan in Singapore and Alex
Lawler in London; editing by James Jukwey)
