Slim gains for oil ahead of OPEC meet
Tuesday, 25 November 2008
SINGAPORE, Nov 24 (AFP): Oil prices gained slightly in Asian trade today, remaining near 50 dollars a barrel as the market prepared for an expected OPEC production cut next weekend, dealers said.
New York's main futures contract, light sweet crude for January delivery, rose 63 cents to 50.56 dollars a barrel.
The contract closed at 49.93 on the New York Mercantile Exchange Friday.
Brent North Sea crude for January was 79 cents higher at 49.98.
Oil on Thursday tumbled below 50 dollars for the first time since early 2005. Plunging equities and weak US economic data sparked fresh concern that a global recession would slash demand.
With prices now far off July's record highs above 147 dollars, the OPEC cartel is to hold an extraordinary meeting on Saturday in Cairo.
Venezuelan Energy Minister Rafael Ramirez said at the weekend that his country will seek a cut in crude production of 1.0 million barrels per day at the gathering.
Libya's OPEC representative, Shukri Ghanem, told AFP on Friday that action should be taken to halt a decline in oil prices, but he did not explicitly repeat his call for oil production to be cut at the Cairo meeting.
David Johnson, an oil analyst with Macquarie Securities in Hong Kong, said he expects the cartel to announce another cut of one million barrels per day.
"People are beginning to say, 'OK careful, they might do something at the end of the week,'" he said, explaining Monday's slight gains in price. "Nobody wants to be caught short."
The Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 per cent of the world's crude, last month announced a cut in its official output quota of 1.5 million barrels a day but the move had no lasting impact on prices.
Johnson said the cuts take time to be implemented. The expected one million barrel additional reduction in output could help prices climb back to 70 or 75 dollars, he said.
New York's main futures contract, light sweet crude for January delivery, rose 63 cents to 50.56 dollars a barrel.
The contract closed at 49.93 on the New York Mercantile Exchange Friday.
Brent North Sea crude for January was 79 cents higher at 49.98.
Oil on Thursday tumbled below 50 dollars for the first time since early 2005. Plunging equities and weak US economic data sparked fresh concern that a global recession would slash demand.
With prices now far off July's record highs above 147 dollars, the OPEC cartel is to hold an extraordinary meeting on Saturday in Cairo.
Venezuelan Energy Minister Rafael Ramirez said at the weekend that his country will seek a cut in crude production of 1.0 million barrels per day at the gathering.
Libya's OPEC representative, Shukri Ghanem, told AFP on Friday that action should be taken to halt a decline in oil prices, but he did not explicitly repeat his call for oil production to be cut at the Cairo meeting.
David Johnson, an oil analyst with Macquarie Securities in Hong Kong, said he expects the cartel to announce another cut of one million barrels per day.
"People are beginning to say, 'OK careful, they might do something at the end of the week,'" he said, explaining Monday's slight gains in price. "Nobody wants to be caught short."
The Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 per cent of the world's crude, last month announced a cut in its official output quota of 1.5 million barrels a day but the move had no lasting impact on prices.
Johnson said the cuts take time to be implemented. The expected one million barrel additional reduction in output could help prices climb back to 70 or 75 dollars, he said.