Oil up in Asia as OPEC refuses to raise output

Oil up in Asia as OPEC refuses to raise output

SINGAPORE (Reuters): Oil prices in Asia inched higher on
Thursday, as OPEC signaled an output rise was not likely in the
near term, despite current sizzling prices.

The news gave an added lift to a market that has already seen
crude prices rise over 12 percent in the last fortnight on the
back of low stocks in the United States, oil's largest consumer.

At 0721 GMT, U.S. light crude futures were at $31.90 per
barrel, up 10 cents from the New York settlement, where the
contract had ended 13 cents higher at $31.80.

Brent crude futures on London's IPE settled on Wednesday 35
cents higher at $32.53, after hitting a 10-year high of $32.80
during Tuesday's IPE trade.

OPEC President Ali Rodriguez of Venezuela said on Wednesday
the group would stick to its price band mechanism, and had no
plans to raise production yet.

"It's not planned yet. Of course if the conditions which were
established (in the band mechanism) occur, then it (a production
increase) will happen," Rodriguez said in Caracas when asked if
OPEC intended to increase production at the moment.

Saudi Arabian newspaper al-Riyadh also reported on Thursday
that OPEC was not expected to take any action on high oil prices
ahead of the group's Vienna meeting in September.

Al-Riyadh quoted OPEC experts as saying there was no reason to
activate the cartel's price band mechanism as the conditions
--that OPEC's crude basket price stay above $28 a barrel for 20
days in a row --had not been met.

"The experts recalled that the OPEC price band mechanism
agreed at the Vienna meeting last June stipulates a production
increase if oil prices exceed $28 a barrel of OPEC oil and not
the North Sea production by which prices are measured and on
condition that the rise in prices continues for 20 consecutive
days," the newspaper said.

According to the price band mechanism, OPEC should raise or
lower output by 500,000 barrels per day only if its basket of
seven crudes moved above the $22-$28 price range for 20
consecutive days or below the band for 10 days.

OPEC's basket price was last at $28.69 a barrel on Tuesday,
keeping it above the price ceiling for the second consecutive
day.

U.S. Energy Secretary Bill Richardson said on Wednesday he was
concerned by hawkish statements from Venezuela on oil prices
which he blamed for high prices.