Talk of OPEC cut boosts oil over $60

BUSINESS DIGEST

October 17, 2006|By Bloomberg News

NEW YORK -- Crude oil rose for a fourth straight day yesterday, trading above $60 a barrel on speculation that OPEC members will agree at a meeting this week to cut production because of a 20 percent drop in prices over the past three months.

The Organization of Petroleum Exporting Countries will meet Thursday to discuss reducing output by 1 million barrels a day, oil ministers including Qatar's Abdullah bin Hamad al-Attiyah said. Oil prices fell last week to a 2006 low as U.S. supplies rose to 14 percent above the five-year average.

"At some point OPEC is going to succeed at getting some kind of cut on the table," said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. "Since it's going to come at a time when demand is up on a seasonal basis, it should succeed in lifting prices."

Crude oil for November delivery rose as much as 30 cents, or 0.5 percent, to $60.24 a barrel in after-hours trading on the New York Mercantile Exchange after closing at $59.94, up $1.37. Futures touched $60 a barrel during the session.

OPEC members will meet in Doha, Qatar, to consider reducing production.

"This accord has been weeks in the making because there's a split on how to make the cut," said Thierry LeFrancois, an energy analyst at Natexis Bleichroeder SA in Paris. "There are partisans in OPEC for a cut in production and partisans on the other side for a cut to quotas."

OPEC, which pumps 40 percent of the world's oil, lowered its forecast for world oil consumption to 84.2 million barrels a day, down 160,000 barrels a day from its previous forecast a month ago, noting slowing global economic growth.

U.S. crude inventories rose above seasonal averages after the summer driving season finished and Gulf of Mexico refinery production was not disrupted by hurricanes this year.

Oil stockpiles in the United States, the world's biggest consumer, jumped 2.41 million barrels to 330.5 million in the week that ended Oct. 6, according to an Energy Department report.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.