Oil prices firmer ahead of Opec meeting

Oil prices firmer ahead of Opec meeting
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First Published: Tue, Dec 04 2007. 12 08 PM IST
Updated: Tue, Dec 04 2007. 12 08 PM IST
By AFP
Singapore: Oil prices were firmer in Asia trade on 4 December ahead of this week’s OPEC meeting with no clear signals as to whether the cartel will raise output, dealers said.
In early morning trade New York’s main contract, light sweet crude for January delivery, gained 34 cents to $89.65 a barrel from $89.31 in late US trades on 3 December. Brent North Sea crude for January delivery added 28 cents to $90.08 a barrel.
Speculation that the Organisation of the Petroleum Exporting Countries (OPEC), which pumps 40% of the world’s crude, will not raise production was the main factor pushing up prices, dealers said.
The pressure on OPEC to increase output has eased considerably now that prices have drifted significantly away from the symbolic $100 mark, they said. Since spiking to a historic peak of $99.29 on 21 November, prices have fallen almost $10.
“This week the market is focused on one of the sources of uncertainty, Opec crude supply,” French banking giant Societe Generale said. “We believe that OPEC will now leave crude production quotas unchanged unless prices dramatically reverse course in the next two days.”
OPEC ministers started to arrive Monday in the United Arab Emirates for the key meeting Wednesday that will decide output levels, signalling they were divided over the need to raise output to meet strong global demand.
Ali al-Nuaimi, the oil minister of Opec kingpin Saudi Arabia, said it was premature to talk about an output increase. “We have not looked at the data yet. Within day or two we will have an opportunity to look at all the data. We will assess and decide,” he said.
Opec is concerned that an increase output could oversupply the market, further damping prices, but that leaving quotas unchanged could send prices back up near $100, analysts said.
They said the decision likely hinges on Saudi Arabia, the world’s biggest oil producer and exporter and the only Opec member believed to have significant untapped output capacity.
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First Published: Tue, Dec 04 2007. 12 08 PM IST
More Topics: Commodities | Energy | Oil | Price | OPEC |