London: World crude prices slipped Monday, 10 September, amid reports that oil kingpin Saudi Arabia wants Opec to hike output when it meets in Vienna on Tuesday.
New York’s main futures contract, light sweet crude for delivery in October dropped 54 cents to $76.16 per barrel. In London, Brent North Sea crude for October delivery lost 67 cents to $74.40.
On Thursday New York-traded crude hit $77.43, not far off its record high of $78.77 on 1 August.
While some analysts have suggested that the current high level of oil prices may push the Organisation of Petroleum Exporting Countries to raise its production quota, most still expect the cartel to maintain output at current levels.
“Everything they’ve said so far indicates that they’re going to do little to change quotas,” said Simon Wardell, an analyst at Global Insight.
“If they did (raise production), we would see a substantial price fall. But quotas are most likely to remain unchanged,” he added.
The outcome to their formal meeting has become uncertain amid speculation that Saudi Arabia is preparing to try to persuade its reluctant partners of the need for a production hike.
Qatar, Iran, Kuwait, United Arab Emirates and Libya have all spoken in favour of keeping output unchanged, but kingpin Saudi Arabia was said to be in favour of an increase.
Morning
Singapore, 10 September Crude oil prices were lower in Asian trade today, one day ahead of a key OPEC meeting in Vienna, dealers said.
At 10:31 am New York’s main contract, light sweet crude for October delivery, fell 15 cents to $76.55 a barrel from $6.70 in late US trades.
Brent North Sea crude for October delivery was off 17 cents at $74.90.
Oil ministers from the Organisation of the Petroleum Exporting Countries (OPEC) are to meet to decide whether to raise output, although traders are expecting no change in the cartel’s production ceilings, dealers said.
“Nothing will change,” said Tobin Gorey, a commodities strategist with the Commonwealth Bank of Australia in Sydney.
“Any doubt there was about it was expelled more and more as the participants made their comments before the meeting,” he said.
High oil prices, which are within striking distance of $80 a barrel, have become an added burden for the world economy in addition to financial market turbulence from a crisis in the US “subprime” housing market.
On 6 September prices in New York had struck $77.43, not far off the record high of $78.77 hit on 1 August.
OPEC producers find themselves under pressure from consumer countries to bring down prices, but they are aware that the outlook for oil demand is clouded given the question marks over global economic growth.
Qatari Oil Minister Abdullah bin Hamad al-Attiyah summed up the dilemma for the 12-member group as he reached Vienna yesterday, saying that an increase in supply risked coinciding with a fall in demand because of weakness in the US.