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Oil prices rise as Statoil, Shell halt some North Sea output
AFP
NEW YORK
Petroleumworld.com 10 15 06
Oil prices rose Friday, recovering at the end of a week which saw New York crude fall to its lowest price so far this year, as Statoil and Shell halted some North Sea production.
The market was focused on the North Sea output problems, as well as falling US heating fuel stocks ahead of the peak-demand northern hemisphere winter, dealers said.
Traders were also digesting news that the Organization of the Petroleum Exporting Countries (OPEC) was mulling a unscheduled October 20 meeting in Qatar to reduce output.
New York's main contract, light sweet crude for delivery in November, closed up 71 cents at 58.57 dollars per barrel, but off earlier highs.
The contract had plunged Thursday to 57.22 dollars -- marking its lowest point since December 19, 2005, and a 27-percent drop from its record high of 78.40 dollars in mid-July.
In London on Friday, Brent North Sea crude for November delivery settled up 76 cents at 59.52 dollars per barrel, also off earlier highs.
Crude futures rose "on news of North Sea production losses," said Barclays Capital analyst Kevin Norrish.
Norway's leading oil company, Statoil, and Anglo-Dutch group Royal Dutch Shell said Friday they had halted production at two oil platforms off the Norwegian coast after safety problems were detected in their lifeboats.
The suspension was requested Thursday by Petroleumtilsyn, an organization responsible for security aboard eight platforms off the Norwegian coast.
The closure of the Draugen and Snorre A platform will reduce overall Norwegian output by 280,000 barrels a day, or a little more than 12 percent of the total.
Oil production in September came to 2.253 million barrels a day.
Statoil said in a statement that work to repair six lifeboats would begin as soon as possible and would take between one and two weeks.
Meanwhile, a possible OPEC output meeting on October 20 in Qatar "is an option" being considered by member nations of the international oil cartel, an OPEC spokesman told AFP.
"It is still something being discussed ... (but) there is nothing confirmed yet," OPEC spokesman Tareq Amin said.
The market has been waiting more than two weeks for a clear signal from OPEC in reaction to plunging crude prices over the last two months.
The 11 members of the cartel have agreed to slash output by one million barrels a day, in a move aimed at shoring up sliding world crude prices.
Prices had slumped earlier this week owing to uncertainty about whether and how OPEC would cut production.
Venezuelan Energy Minister Rafael Ramirez said Friday that OPEC was preparing to cut output by some one million barrels a day starting in December in responses to sagging prices.
"We think this is a healthy and necessary measure because there is significant overproduction, abundant supplies on the market and this could lead to a collapse of prices," Ramirez said in an interview with state television.
However, some analyst continued to harbor doubts over OPEC's likely actions.
"Even with the US energy secretary trying to shape OPEC actions, by suggesting that any cuts would simply increase non-OPEC market share, there still doesn't seem to be a solid feeling on what OPEC will do with respect to production," said Mike Fitzpatrick, an analyst at Fimat.
AFP 13 1944 GMT 10 06
Copyright ©2006 AFP. All Rights Reserved.
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