Oil hovers above $14, waits for Saudi word
Oil hovers above $14, waits for Saudi word
LONDON (Reuters): Oil prices hovered just above US$14 a barrel
on Monday as traders waited to see if OPEC kingpin Saudi Arabia
would heed calls for an emergency meeting of the cartel to
discuss a glut in world oil supplies.
International benchmark Brent blend was trading three cents
down at $14.14 a barrel at 1748 GMT -- more than $5 below the
average price for last year and some $11 below a post-Gulf War
peak hit about 16-months ago.
Indonesian Mines and Energy Minister and OPEC President Ida
Bagus Sudjana last week called for an emergency meeting to
discuss falling prices.
All members of the Organization of the Petroleum Exporting
Countries have been approached to see if they would support
emergency talks following a scheduled ministerial monitoring
committee scheduled for March 16 in Vienna.
But a Gulf source said Saudi Arabia was still waiting to see
what OPEC would propose for any such meeting before it announced
its response.
Gulf heavyweights Saudi Arabia, Iran and Kuwait in recent days
have called on OPEC members to cut overproduction.
But Venezuela, considered the group's leading violator of
quotas, on Friday refused to cut oil output by even one barrel.
Some dealers doubted Saudi Arabia would agree to take action
to support prices without cast-iron commitments by quota-busters
to stick to their allocations.
"I see nothing to suggest the Saudis will cut their
output...nor anything to suggest the Venezuelans will either,"
said Christopher Bellew, an energy futures trader and director of
brokerage of Prudential-Bache in London.
The current oil price weakness is partly due to OPEC's
decision in November to raise its overall output ceiling by 10
percent to 27.5 million bpd. But early estimates for February
show quota-cheating has already taken output to more than one
million barrels per day higher.
Iraqi exports under the third round of the oil-for-food
agreement with the United Nations resumed in January and the U.N.
Security Council has approved an increase in sales to $5.2
billion every six months from $2 billion.