Oil stays above 80 dollars
Friday, 19 March 2010
SINGAPORE, March 18 (AFP): Oil fell in Asian trade yesterday, erasing overnight gains in reaction to OPEC's decision to keep output targets unchanged, analysts said.
New York's main contract, light sweet crude for April delivery, fell 27 cents to 82.66 dollars a barrel.
Brent North Sea crude for May delivery was off 37 cents to 81.59 dollars.
But the Organisation of the Petroleum Exporting Countries' (OPEC) decision to keep output quotas unchanged will support prices in the long-term, analysts said, adding Thursday's price fall was likely to be temporary.
"We expect that OPEC will retain a cautious approach in the coming year, only increasing production targets when it is clear that growth in oil demand has wound back the inventory overhang," analysts from the Commonwealth Bank of Australia said.
"This approach will support oil prices," they said.
OPEC, which produces 40 per cent of world crude, left its output ceiling unchanged at 24.84 million barrels a day at a meeting in Vienna, citing uncertainty in the macroeconomic environment and world oil demand.
The oil cartel said it would review the economic situation at its next ordinary meeting in Vienna on October 14.
John Kilduff of Round Earth Capital said the OPEC meeting had been "supportive for prices."
He said with crude oil already above 80 dollars a barrel, OPEC should be starting to talk about raising production, "and by not doing so, they are causing the market to react bullishly to their production policy."
Barclays Capital analysts said OPEC seemed to be paving the way for prices to go higher.
"We would expect the market to come to perceive the meeting as having provided another green flag in the gradual and continuing transition to the consolidation of an 80-dollar to 90- dollar per barrel price range," they said in a client note.
New York's main contract, light sweet crude for April delivery, fell 27 cents to 82.66 dollars a barrel.
Brent North Sea crude for May delivery was off 37 cents to 81.59 dollars.
But the Organisation of the Petroleum Exporting Countries' (OPEC) decision to keep output quotas unchanged will support prices in the long-term, analysts said, adding Thursday's price fall was likely to be temporary.
"We expect that OPEC will retain a cautious approach in the coming year, only increasing production targets when it is clear that growth in oil demand has wound back the inventory overhang," analysts from the Commonwealth Bank of Australia said.
"This approach will support oil prices," they said.
OPEC, which produces 40 per cent of world crude, left its output ceiling unchanged at 24.84 million barrels a day at a meeting in Vienna, citing uncertainty in the macroeconomic environment and world oil demand.
The oil cartel said it would review the economic situation at its next ordinary meeting in Vienna on October 14.
John Kilduff of Round Earth Capital said the OPEC meeting had been "supportive for prices."
He said with crude oil already above 80 dollars a barrel, OPEC should be starting to talk about raising production, "and by not doing so, they are causing the market to react bullishly to their production policy."
Barclays Capital analysts said OPEC seemed to be paving the way for prices to go higher.
"We would expect the market to come to perceive the meeting as having provided another green flag in the gradual and continuing transition to the consolidation of an 80-dollar to 90- dollar per barrel price range," they said in a client note.