Oil ends up above $43 on Iraq woes
Oil ends up above $43 on Iraq woes
Reuters, Singapore
U.S. oil prices rose slightly on Monday as Iraq's oil exports
continued at more than 30 percent below normal after sabotage
attacks on pipelines.
U.S. light crude climbed seven cents to US$43.25 a barrel,
following a string of losses last week that took oil more than $6
below the record peak at $49.40 struck on Aug. 20.
Brent crude trade on London's International Petroleum Exchange
was shut for a public holiday.
Iraqi oil exports ran at a reduced 1.4 million barrels per day
(bpd) on Monday, compared with two million bpd a week ago, and an
Iraqi oil official said work to repair sabotaged pipelines would
take five days.
Firefighters on Sunday battled to put out a blaze in the South
Rumaila oilfield after spilt oil and gas from damaged pipelines
ignited.
Turmoil in Iraq and frequent attacks on oil infrastructure
have been a major factor in underpinning the sharp rally in crude
prices this year.
But last week U.S. oil slid more than $6 after its failure to
break through the $50 mark triggered a stretch of profit taking.
U.S. Commodity Futures Trading Commission data on Friday showed
that many speculators had taken their profits from the rally.
Despite last week's slide that knocked U.S. crude down 13
percent from its peak, prices are still 33 percent higher than at
the end of 2003 as producers pump close to full tilt to match
soaring demand.
The head of the OPEC producers' cartel said on Monday that the
group, which controls more than half of world exports, aimed to
increase spare output capacity by about one million bpd in the
next few months in an effort to bring down sky-high prices.
The Organization of the Petroleum Exporting Countries (OPEC)
is estimated to be pumping close to 30 million bpd, its highest
level since 1979, in an effort to dampen this year's price rally.
"...In response to expected demand growth in the near future,
member countries have plans in place to further increase
production capacity by around one million bpd towards the end of
this year and into 2005," OPEC president Purnomo Yusgiantoro said
in a written statement handed to reporters in Jakarta.
"In addition, plans for additional capacity expansions are
available and could be enacted soon. However, this capacity
would, typically, become available around 18 months after
commencement of this process."
Only OPEC's Saudi Arabia has any significant spare capacity
within the 11-member producers' cartel, which is due to meet on
Sept. 15 in Vienna to review output policy.
World supplies are struggling to keep up with a surge in
demand, which is growing at the fastest pace in 24 years, leaving
little room for any hiccup in the supply chain.
Russia's biggest oil exporting firm YUKOS faces a deadline
this week from tax authorities over a multi-billion dollar unpaid
debt, but analysts expect the company to be given some breathing
space, with little likelihood of disruptions to the company's
production and exports.
President Vladimir Putin assured U.S. counterpart George W.
Bush last week that Russia, the world's second-biggest exporter,
would not allow overseas sales to fall at a time when oil prices
were hovering close to historic highs.