Oil in Asia crawls near $34 as OPEC talks output
Oil in Asia crawls near $34 as OPEC talks output
SINGAPORE (Reuters): Oil in Asia crawled towards a near decade high above $34 a barrel on Wednesday as Saudi Arabia and other OPEC members talked of an imminent output hike.
Benchmark New York Mercantile Exchange (NYMEX) October crude futures traded up 14 cents at $33.97 a barrel by 0722 GMT, adding to its 45-cent gain on Tuesday.
The market settled at a lower $33.93 a barrel on Tuesday, after peaking at $34.10 briefly during intra-day trade.
The NYMEX market last peaked in March at $34.37, the highest since early 1991.
NYMEX was lagging London Brent crude prices, which hit a 10- year high on Monday at $32.85, and then rose further on Tuesday to $33.00 a barrel.
Oil has rallied and stayed above the $30 a barrel level for almost four weeks on fears Western heating oil supplies would fall short of demand this winter.
OPEC, expected to hike output at a meeting due in Vienna on September 10, has so far failed to calm the fiery market, which was stoked last month by reports of 24-year low U.S. crude stocks.
The 11-member Organization of Petroleum Exporting Countries (OPEC) controls the bulk of world incremental supplies.
On Wednesday, dealers brushed aside an assurance from the world's largest oil exporter and OPEC kingpin Saudi Arabia that it could hike oil supplies if needed.
"There is absolutely no problem putting additional crude oil into the market," al-Naimi told reporters on the sidelines of a business gathering in New York.
"But we must be extremely careful that efficiency is required by people running refineries," he said.
Al-Naimi said the market needs to realize that the industry was living with less inventories, and blamed recent price run-up on "hype."
Saudi Crown Prince Abdullah told a dinner gathering in New York earlier that the kingdom would do its best to keep the market in equilibrium and prices steady.
But he appealed to consumer countries to reconsider the high oil taxes.
The Crown Prince, seen as the head of the world's biggest oil producer, will meet U.S. President Clinton on Wednesday.
The leaders are expected to discuss solutions to check the runaway oil prices, which are seen as reasonable at levels around $25 a barrel.
Other OPEC members also favored an output hike, but no more than 500,000 bpd, which traders said would have no impact on the market.
OPEC has hiked output twice this year, by a combined total 2.4 million bpd, but failed both times failed to stop the market from overheating.
Kuwait oil minister Sheikh Saud Nasser al-Sabah told Reuters on Tuesday that they would need further convincing for an output hike beyond 500,000 bpd.
The oil minister of sanction-bound Iraq, Amir Mohammed Rasheed -- whose oil sales are controlled by United Nations -- blamed manipulators for exerting undue pressure on OPEC for an output hike.