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Oil prices rebound as OPEC rules out output hike
NEW YORK
Petroleumworld.com 11 15 07
World oil prices rebounded strongly Wednesday after OPEC chief Abdallah al-Badri rejected US calls for the oil producers' cartel to boost output to help cool the market.
New York's main oil futures contract, light sweet crude for December delivery, surged 2.92 dollars to close at 94.09 dollars per barrel.
In London, Brent North Sea crude for December delivery settled up a hefty 2.53 dollars at 91.36 dollars per barrel.
Crude futures had closed down over three dollars on Tuesday after the International Energy Agency lowered its global demand forecast for oil.
A week ago, New York's main contract struck an historic peak of 98.62 dollars and Brent raced to an all-time high of 95.19 dollars on fears of tight energy supplies in the United States, the world's biggest energy user.
On Wednesday, Badri, a Libyan official and secretary general of the Organization of the Petroleum Exporting Countries, said a final decision on output would be made by the cartel's oil ministers at a meeting in the UAE capital Abu Dhabi.
"At this time, frankly we don't see that we need to add more oil in the market," he said at a news conference in Riyadh, Saudia Arabia, ahead of a rare weekend OPEC summit there to discuss long-term oil supplies.
"There is a plenty of oil in the market. There is no shortage of oil," Badri insisted in response to a question about a decline in US and Japanese oil inventories in the past few weeks and following calls by Washington to raise output.
Speaking in Rome on Wednesday, IEA Executive Director Nobuo Tanaka called on oil producers "to react" to current levels of crude prices.
"We wish producing countries to react to the current market situation," Tanaka said in the Italian capital, where he is to attend a world energy conference on Thursday.
"If these high prices continue it will have a very bad impact on the world economy."
The IEA in a monthly report published Tuesday said spikes in world oil prices could be losing momentum as demand declines and OPEC output picks up.
The IEA, an energy policy adviser to major developed countries, also lowered its global oil demand forecast for the fourth quarter of this year.
It cited weaker economic activity in the United States and pointed to an increase of 410,000 barrels per day in OPEC production during October.
Elsewhere the market was gearing up for the release Thursday of a weekly US government report on domestic energy stocks.
"Oil prices were higher (on Wednesday), following expectations that US EIA data ... will show that oil inventories fell for the fourth week in a row," Sucden analyst Michael Davies said.
Analysts are betting that stockpiles of US crude fell by 750,000 barrels last week, while inventories of distillates and gasoline each dropped by 500,000 barrels.
The distillates report will be closely watched as the United States heads into the northern hemisphere winter, when demand for heating fuel typically peaks.
Story by from AFP 14 2052 GMT 11 07
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