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Oil Rises as OPEC
Ministers Say Group May Not Raise Production
By Nesa Subrahmaniyan
Dec. 3 (Bloomberg) -- Crude oil rose in
New York after ministers from the Organization of
Petroleum Exporting Countries said the group may not
need to raise output at a meeting this week because of
adequate stockpiles.
Saudi Arabian Oil Minister Ali al-Naimi
said Dec. 1 there's ``absolutely ample'' supplies in the
market, and Algerian Oil Minister Chakib Khelil said
yesterday inventories are high and there's no need to
increase production. The International Energy Agency has
urged OPEC to pump more to meet seasonal peak in demand,
during the Northern Hemisphere winter.
``When prices were near $100, OPEC may
have been prompted to increase but prices have dropped
about $10 since the record in late November,'' said
Tetsu Emori, a fund manager at Astmax Futures Ltd. in
Tokyo. ``Given that supplies are comfortable going
forward, OPEC may even cut output.''
Crude oil for January delivery rose as
much as $1.13, or 1.3 percent, to $89.84 a barrel in
after-hours electronic trading on the New York
Mercantile Exchange. It was at $89.52 at 10:14 a.m. in
Singapore.
On Nov. 30, the contract fell $2.30, or
2.5 percent, to $88.71, taking the decline for the week
to 9.7 percent. That was its biggest weekly loss in 2
1/2 years on concern slowing U.S. economic growth will
cut demand. New York crude oil futures closed at a
record $98.18 a barrel on Nov. 23.
Nobuo Tanaka, executive director of the
Paris-based International Energy Agency, said Nov. 29
that OPEC needs to raise production. OPEC members are
scheduled to meet in Abu Dhabi on Dec. 5.
`Big Glut'
``We should not create a big glut in the
market,'' Qatar's energy minister, Abdullah bin Hamad
al-Attiyah, said Dec. 1. His comment was echoed by
officials from Venezuela and the United Arab Emirates.
OPEC agreed to add 500,000 barrels a day
to supplies starting in November at a Sept. 11 meeting,
the first increase in more than a year, following
requests by the U.S. and Europe to help ease prices. Oil
has gained 46 percent this year.
The decision, which took effect Nov. 1,
failed to stop the rally and crude reached an intraday
record $99.29 on Nov. 21, the highest since New York
futures started trading in 1983.
Ten out of 18 analysts forecast that
OPEC will keep levels unchanged on Dec. 5, according to
a Bloomberg survey on Nov. 30. The rest expect an
increase of 500,000 to 700,000 barrels a day. OPEC's 12
members pumped 31.2 million barrels a day in October.
There's still concern among less
``hawkish'' members of OPEC, such as Saudi Arabia, that
high oil prices may crimp economic growth, said Gerard
Burg, a minerals and energy economist at National
Australia Bank Ltd. in Melbourne.
``I suspect almost irrespective of what
they decide Saudi Arabia's probably going to increase
production,'' Burg said. ``They are always the ones that
seem to be the least hawkish and always prefer to have
prices at reasonably lower levels.''
Brent crude oil for January settlement
gained as much as 78 cents, or 0.9 percent, to $89.04 a
barrel on the London-based ICE Futures Europe exchange.
It was trading at $88.89 at 10:11 a.m. Singapore time.
To contact the reporter on this story:
Nesa Subrahmaniyan in Singapore at
nesas@bloomberg.net
.
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