Oil prices fall as OPEC signals all options open
Oil prices fall as OPEC signals all options open
LONDON (Reuters): Oil prices slipped on Monday following signals that key producers have not ruled out raising production when output curbs expire at the end of March.
Benchmark Brent crude was 31 US cents lower at $26.76 a barrel, within 50 cents of nine-year highs hit last month.
Brent has averaged $19.47 in the 12 months to date, above a 1999 average of $18.03 and sharply above $13.34 in 1998.
Prices fell back after the Middle East Economic Survey quoted a senior oil official from an OPEC country saying a small output increase as early as April still remained a possibility.
"The March meeting is completely open for all possibilities. There is no forgone conclusion and there is no decision yet as what to do in March," MEES quoted the official as saying.
"The options...include the possibility of a small increase beginning in the second quarter, or an increase at the beginning of the third or fourth quarter," the official told MEES.
OPEC ministers are to meet in Vienna on March 27 to decide whether to extend their current export cuts -- due to expire in March -- aimed at removing a pledged 4.3 million barrels per day from the market.
Prices are riding near a nine-year peak of $27.11 hit on January 21 after 10 months of drastic OPEC export curbs reduced U.S. crude inventories to their lowest in over a decade.
Last week data from the United States showed commercial crude stockpiles at the lowest level since the 1970s -- 281 million barrels versus 333 million this time last year.
A Gulf source familiar with Saudi policy told Reuters on Sunday that no decision on OPEC output policy had yet been finalized ahead of the group's March meeting.
He said producers wanted to ensure the market did not suffer a shortage.
"But we are not going to hurry this decision. We have another six weeks or so to go. We don't want to base a decision on false information," the source said
A Reuters survey found OPEC oil exporters kept compliance with supply curbs little changed in January despite the temptation of yet another surge in crude prices.
Higher output from Iraq, not party to OPEC limits, pushed overall cartel output up 560,000 bpd from December to 26.29 million bpd, according to the survey of OPEC and industry officials, consultants and tanker trackers.
The survey shows that compliance by the 10 OPEC members that participate in supply restrictions slipped a notch to 73 percent in January from a December estimate of 74 percent.
OPEC member Indonesia urged OPEC to allow only a small rise in output when the cartel meets, saying a maximum oil price of $26 was acceptable.