Tue, 08 Mar 2005

From: AFP

OPEC president remarks send oil prices falling

Agence France-Presse, London

World oil prices eased on Monday amid calming comments from the OPEC president, after surging to a record high in London and a four-month high in New York last week on frenzied speculative buying, dealers said.

New York's main contract, light sweet crude for delivery in April, fell 16 U.S. cents to US$53.62 a barrel in electronic dealing.

In London, the price of Brent North Sea crude oil for delivery in April dropped 33 U.S. cents to $51.47 a barrel.

The world oil market was well supplied and OPEC was committed to maintaining stability and adequate supplies, Organization of Petroleum Exporting Countries (OPEC) president Sheikh Sabah Al- Ahmed Al-Sabah said on Monday.

The organization had watched the OPEC reference basket price of oil rise by more than $8.5 a barrel since Feb. 8 to $48.36 on Friday, he said.

"OPEC is concerned about this price development despite the fact that the market is well supplied and global crude oil stocks have continued to build, now standing above their five-year average," he said in a statement.

"OPEC is committed to maintaining stability and ensuring that global markets remain well supplied at all times," the statement said.

"Towards this end, OPEC has increased production levels three times during 2004.

"Currently the organisation is producing around 29.5 million barrels per day which has ensured that demand is fully met."

The comments came as the 11-nation cartel prepared to meet on March 16 in Isfahan, Iran.

Oil prices rocketed last Thursday on huge speculative buying that was sparked by concern over tight supplies amid strong global demand.

Crude futures on the New York Mercantile Exchange had surged by as much as $2.15 to $55.20 a barrel last Thursday -- a level approaching the all-time high of $55.67 hit on Oct. 25.

And Brent had closed up 73 U.S. cents at $51.95 a barrel on Thursday after surging at one point by as much as $1.78 to reach a new high point of $53.

The previous high had come on Oct. 27, when Brent reached $51.94.