Oil market 'getting hot' after OPEC comments: Analyst
Prices threatened to go higher on Monday after members of OPEC oil producers' cartel rejected calls to raise output. India's war on inflation | World inflation in pics
By Agencies |
SINGAPORE: World oil prices threatened to go even higher on Monday after members of the OPEC oil producers' cartel rejected calls to raise output, analysts said.
"Things are getting hot out there again," said Dave Ernsberger, Asia director of global energy information provider Platts.
In afternoon trade, New York's main oil futures contract, light sweet crude for delivery in May, was four cents lower at 116.65 dollars a barrel after closing at a record 116.69 dollars on Friday at the New York Mercantile Exchange.
The contract earlier struck an all-time peak of 117.05 dollars. Brent North Sea crude for June delivery was two cents lower at 113.90 dollars a barrel after closing at a record 113.92 dollars on Friday in London. The contract had earlier reached an intraday high of 114.22 dollars.
Over the past week, the New York contract has risen about seven dollars and Brent has climbed by more than 5.50 dollars, boosted by a weaker US currency and supply worries.
Ernsberger said prices will likely shoot even higher in the wake of weekend comments by ministers of the Organisation of the Petroleum Exporting Countries (OPEC). The cartel produces about 40 percent of the world's oil.
The OPEC president, Chakib Khelil, said there was no need for an immediate increase in crude production because there is a balance between supply and demand.
Saudi Arabia's oil minister was quoted as saying there was no need "to get worked up" and call for more oil to be put on the market. Saudi Arabia is the cartel's number one producer.
Separately, Mahmoud Ahmadinejad, the president of OPEC's number two producer Iran, was quoted Saturday as saying oil is priced too low and "should find its real value".
The comments "raise the stakes for the traders yet another notch," Ernsberger said, emphasising that this was his personal opinion.
"It's unfathomable to almost everybody why OPEC wouldn't produce as much as it could."
David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney, said the OPEC comments were an extension of "what their policy has already been".
Ernsberger said additional price support is coming from signs that gasoline demand in the United States is better than expected ahead of the summer driving season, when many Americans take to the highways for holidays.
Oil prices were recently boosted by the US dollar, which hit a record low of 1.5984 dollars against the euro on Thursday. A weaker greenback stimulates demand for dollar-priced goods because they become cheaper for foreign buyers holding stronger currencies.
On Monday afternoon the euro was at 1.5831 dollars, after a recovery on Friday, but Ernsberger said oil prices might not necessarily pull back even if the dollar strengthened.
Anglo-Dutch oil group Shell said Saturday it had slightly reduced oil production following a militant attack on a major supply pipeline in southern Nigeria.
Ernsberger said the disruption "is just not a big deal".
"Things are getting hot out there again," said Dave Ernsberger, Asia director of global energy information provider Platts.
In afternoon trade, New York's main oil futures contract, light sweet crude for delivery in May, was four cents lower at 116.65 dollars a barrel after closing at a record 116.69 dollars on Friday at the New York Mercantile Exchange.
The contract earlier struck an all-time peak of 117.05 dollars. Brent North Sea crude for June delivery was two cents lower at 113.90 dollars a barrel after closing at a record 113.92 dollars on Friday in London. The contract had earlier reached an intraday high of 114.22 dollars.
Over the past week, the New York contract has risen about seven dollars and Brent has climbed by more than 5.50 dollars, boosted by a weaker US currency and supply worries.
Ernsberger said prices will likely shoot even higher in the wake of weekend comments by ministers of the Organisation of the Petroleum Exporting Countries (OPEC). The cartel produces about 40 percent of the world's oil.
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The OPEC president, Chakib Khelil, said there was no need for an immediate increase in crude production because there is a balance between supply and demand.
Saudi Arabia's oil minister was quoted as saying there was no need "to get worked up" and call for more oil to be put on the market. Saudi Arabia is the cartel's number one producer.
Separately, Mahmoud Ahmadinejad, the president of OPEC's number two producer Iran, was quoted Saturday as saying oil is priced too low and "should find its real value".
The comments "raise the stakes for the traders yet another notch," Ernsberger said, emphasising that this was his personal opinion.
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"It's unfathomable to almost everybody why OPEC wouldn't produce as much as it could."
David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney, said the OPEC comments were an extension of "what their policy has already been".
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Ernsberger said additional price support is coming from signs that gasoline demand in the United States is better than expected ahead of the summer driving season, when many Americans take to the highways for holidays.
Oil prices were recently boosted by the US dollar, which hit a record low of 1.5984 dollars against the euro on Thursday. A weaker greenback stimulates demand for dollar-priced goods because they become cheaper for foreign buyers holding stronger currencies.
On Monday afternoon the euro was at 1.5831 dollars, after a recovery on Friday, but Ernsberger said oil prices might not necessarily pull back even if the dollar strengthened.
Anglo-Dutch oil group Shell said Saturday it had slightly reduced oil production following a militant attack on a major supply pipeline in southern Nigeria.
Ernsberger said the disruption "is just not a big deal".
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