Oil price edges upwards as ministers meet

Oil price edges upwards as ministers meet

Agence France-Presse, London

Oil prices inched upwards on Friday as dealers took a meeting between the energy ministers of Saudi Arabia, Venezuela and Mexico as a sign that producers might be paving the way for fresh curbs on supplies.

The price of benchmark Brent North Sea crude oil for July delivery rose five cents to US$27.60 per barrel in early deals.

New York's light sweet crude July contract was up 21 cents to $30.95 dollars in out-of-hours electronic trading.

Saudi oil minister Ali al-Nuaimi and the energy ministers of Venezuela and Mexico, Rafael Ramirez and Ernesto Martens, respectively, were due to meet in Madrid, days ahead of a gathering of members of industry cartel OPEC.

The Organization of Petroleum Exporting Countries meets in Qatar on Wednesday and has been tipped to agree production curbs in a bid to support prices.

A strong market caused by low crude oil stocks in the United States ahead of its traditionally gasoline-intensive summer holiday season has reduced the immediate likelihood of production cuts, but analysts said Friday's meeting was significant.

"There is a view that when they talk, they are looking for consent to support prices if needed in future," said Commerzbank's Jon Rigby.

"There is clear action going on at the moment to manage the oil price even if it is not exactly clear what is going on," he said.

"We are starting to think that OPEC won't do anything on June 11, but they are attempting to set out a framework by which they can support prices going forward, because when Iraq will start producing, oil prices will inevitably begin to fall."

The recent lifting of United Nations sanctions on Iraq following the removal of Saddam Hussein's regime by U.S.-led forces has paved the way for the oil-rich nation to resume exports immediately.

However technical problems caused by the decrepit state of its oil infrastructure has delayed large-scale production for some weeks.