Oil holds steady bracing for possible OPEC cut<\/p>\n
LONDON (Reuters): Oil prices held firm on Tuesday amid growing
\nexpectations that the OPEC cartel could curb supplies again.<\/p>\n
London's Brent crude futures for April delivery traded one
\ncent lower at US$27.30 a barrel. U.S. March light crude was 34
\ncents stronger at $29.50.<\/p>\n
Dealers said the market was firmly focused on the possibility
\nof a fresh OPEC oil production cut when the cartel holds a policy
\nmeeting in Vienna next month.<\/p>\n
OPEC is leaning towards another reduction because it fears an
\neconomic slowdown will stunt demand for its crude, a Gulf source
\nfamiliar with policy in Saudi Arabia, the cartel's biggest and
\nmost influential producer, said last week.<\/p>\n
OPEC Secretary-General Ali Rodriguez said on Monday there was
\n"almost a conviction" among producers for a production cut ahead
\nof a forecast drop in demand in the second quarter of the year.<\/p>\n
Rodriguez said the supply curb could be up to a million
\nbarrels per day "in the worst case scenario."<\/p>\n
There are fears among consumer nations that lower OPEC
\nsupplies could lead to a price spike that could dent economic
\ngrowth.<\/p>\n
Despite opposition from key consumers the United States and
\nEurope, OPEC slashed output by 1.5 million barrels per day (bpd)
\nin January to offset an expected seasonal fall in demand.<\/p>\n
"There are worrying indications that OPEC hawks might see a
\ndrop in the price of the basket below $25 a barrel as a signal
\nfor further cuts," said the Center for Global Energy Studies in
\nits monthly oil report.<\/p>\n
OPEC has a preferred price range of $22 to $28 for its basket
\nof seven crudes which on Monday was valued at $25.28.<\/p>\n
Some OPEC hawks would prefer to defend a price nearer to the
\ntop end of the range while the United States would prefer prices
\nat $20-$25 for light U.S. crude -- equivalent to $16-$21 for the
\nOPEC basket.<\/p>\n
One dealer said an OPEC cut of about 600,000 bpd would be wise
\ngiven the International Energy Agency's (IEA) oil market report
\nlast week which revised down the outlook for global oil demand
\ngrowth this year by 140,000 bpd to 1.5 million bpd.<\/p>\n
"It is probably a fairly sensible measure given the demand
\nsituation. You have the IEA reducing demand figures. There is no
\nsign of any panic in the market," said Tony Machacek of
\nPrudential Bache.<\/p>\n
Energy Minister Purnomo Yusgiantoro said on Tuesday that an
\nIndonesian delegation will seek support from fellow OPEC member
\nNigeria for a further output cut on a visit to Abuja next week.<\/p>\n
"For Indonesia, OPEC needs to cut production during its
\nmeeting in March. According to a study there will be a 1.5
\nmillion barrels per day drop in demand," Yusgiantoro said.<\/p>\n
But Iranian Oil Minister Bijan Zanganeh has not committed to
\nnew supply restraints, saying it was too early to predict whether
\nOPEC ministers would decide to cut output.<\/p>\n
"If prices are stable, we don't need to act in March, it
\ndepends on the market situation," he said on Tuesday during a
\nvisit to Japan. Iran is OPEC's second largest producer.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/oil-holds-steady-bracing-for-possible-opec-cut-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}