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Oil prices dip ahead of OPEC
AFP
NEW YORK
Petroleumworld.com 12 13 06World crude prices crept lower in hesitant trading Tuesday as OPEC ministers began arriving in Nigeria for a meeting this week that is expected to cut the cartel's output further.
New York's main contract, light sweet crude for delivery in January, dipped 20 cents to close at 61.02 dollars a barrel.
In London trading, Brent North Sea crude for January delivery settled down 32 cents at 61.52 dollars a barrel.
Fimat analyst John Kilduff noted that forecasts of warmer US weather had depressed oil prices on Monday.
"Consequently, sentiment still remains generally negative. High inventories and a shift to mild weather allows refiners to rebuild product stocks," he said.
"The markets are also being undermined by conflicting signals from OPEC and this is creating a lot of uncertainty over whether the cartel will manage another production cut at Thursday's meeting," he added.
Prices had been up for much of the day, "still underpinned by the possibility that OPEC members would agree on another supply reduction," Sucden analyst Michael Davies said in London.
Before leaving for the Nigerian capital Abuja, Iranian Oil Minister Kazem Vaziri Hamaneh again stressed that Iran supported an output cut to keep oil prices around the 60-dollar mark.
"Like most of OPEC members, Iran does not consider oil prices lower than 60 dollars a barrel appropriate. Given the considerable oil oversupply, we will try to have a production cut," he was quoted as saying by the Shana agency.
The 11-member Organization of the Petroleum Exporting Countries produces about a third of global oil supplies. Members meet regularly to fix their output quota to control prices and maximize their oil revenues.
Kuwaiti Energy Minister Sheikh Ali Jarrah al-Sabah said Tuesday that OPEC countries were "satisfied" with the current price of oil but were concerned about high national reserves.
"I believe that OPEC members are satisfied with these prices, but we are afraid from the impacts of the (large) stocks," Sheikh Ali said before departing for Abuja.
At its last meeting in Qatar in October, OPEC approved a cut in its output quota of 1.2 million barrels a day to stem falling prices, which have dropped from record highs above 78 dollars in July and August.
Traders have speculated that OPEC could agree another cut of 500,000 barrels in Nigeria this week.
But Fimat's Kilduff said some cartel members "are concerned that another production cut, with prices near 60 dollars per barrel, could create a genuine economic slowdown, hurting longer-term energy demand."
Meanwhile Angola, sub-Saharan Africa's second-biggest oil producer after Nigeria, could be admitted as the 12th member of OPEC on Thursday, Qatari Energy Minister Abdullah bin Hamad al-Attiyah said in Nigeria.
AFP 12 2114 GMT 12 06
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