after members of the OPEC oil producers' cartel rejected calls to
raise output, analysts said.
"Things are getting hot out there again," said Dave Ernsberger, Asia
director of global energy information provider Platts.
In afternoon trade, New York's main oil futures contract, light sweet
crude for delivery in May, was four cents lower at 116.65 dollars a
barrel after closing at a record 116.69 dollars on Friday at the New
York Mercantile Exchange.
The contract earlier struck an all-time peak of 117.05 dollars. Brent
North Sea crude for June delivery was two cents lower at 113.90
dollars a barrel after closing at a record 113.92 dollars on Friday in
London. The contract had earlier reached an intraday high of 114.22
dollars.
Over the past week, the New York contract has risen about seven
dollars and Brent has climbed by more than 5.50 dollars, boosted by a
weaker US currency and supply worries.
Ernsberger said prices will likely shoot even higher in the wake of
weekend comments by ministers of the Organisation of the Petroleum
Exporting Countries (OPEC). The cartel produces about 40 percent of
the world's oil.
The OPEC president, Chakib Khelil, said there was no need for an
immediate increase in crude production because there is a balance
between supply and demand.
Saudi Arabia's oil minister was quoted as saying there was no need "to
get worked up" and call for more oil to be put on the market. Saudi
Arabia is the cartel's number one producer.
Separately, Mahmoud Ahmadinejad, the president of OPEC's number two
producer Iran, was quoted Saturday as saying oil is priced too low and
"should find its real value".
The comments "raise the stakes for the traders yet another notch,"
Ernsberger said, emphasising that this was his personal opinion.
"It's unfathomable to almost everybody why OPEC wouldn't produce as
much as it could."
David Moore, a commodity strategist at the Commonwealth Bank of
Australia in Sydney, said the OPEC comments were an extension of "what
their policy has already been".
Ernsberger said additional price support is coming from signs that
gasoline demand in the United States is better than expected ahead of
the summer driving season, when many Americans take to the highways
for holidays.
Oil prices were recently boosted by the US dollar, which hit a record
low of 1.5984 dollars against the euro on Thursday. A weaker greenback
stimulates demand for dollar-priced goods because they become cheaper
for foreign buyers holding stronger currencies.
On Monday afternoon the euro was at 1.5831 dollars, after a recovery
on Friday, but Ernsberger said oil prices might not necessarily pull
back even if the dollar strengthened.
Anglo-Dutch oil group Shell said Saturday it had slightly reduced oil
production following a militant attack on a major supply pipeline in
southern Nigeria.
Ernsberger said the disruption "is just not a big deal".
Source : Economic Times
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