Oil prices steady ahead of OPEC meeting

Oil prices steady ahead of OPEC meeting

Agence France-Presse, Singapore

Oil prices were steady in Asian trading on Monday, underpinned by expectations that OPEC will cut output when it meets this week, dealers said.

The benchmark New York light sweet crude contract for May delivery briefly dipped to US$30.06 a barrel in after hours trade but at around 11:50 am (0350 GMT) was back at its New York close of $30.55 on Thursday when trading ceased for the Easter weekend.

The lower price in early trade was "not an accurate reflection of price trends," said a dealer with a European firm.

"Some people were probably short-covering ahead of the (May) contract's closure. The June contract is a better representation of the trend," he said. Trading shifts to the June contract on Tuesday.

The dealer said the Organization of Petroleum Exporting Countries (OPEC) will most likely cut output when it meets Thursday.

But he said prices should hover around current levels unless OPEC cuts production by more than one million barrels a day.

OPEC ministers are expected to seek a production cut when they meet in Vienna, but deciding how output should be reduced and by whom could prove more difficult, analysts say.

With OPEC already overshooting its production quota by seven percent, according to March trading figures, there could be heated debate over whether members' individual ceilings need to be reduced or simply observed.

Among the factors clouding the cartel's deliberations will be the continuing uncertainty over when Iraqi oil exports are most likely to resume.