Oil - Brent futures surge on signs OPEC won´t hike output, Iraq pipeline fire
Tuesday, September 14, 2004 10:55:58 AM
Oil - Brent futures surge on signs OPEC won't hike output, Iraq pipeline fire LONDON (AFX) - Brent crude futures surged in early deals on rising signs that OPEC will decline calls to raise production quotas at tomorrow's meeting in Vienna and amid fresh sabotage against Iraq's export pipelines, dealers said
Hurricane Ivan's approach towards the Gulf of Mexico, where both BP and Shell closed production facilities in several phases Sunday and yesterday, also pressured prices, they said
At 11.05 am, benchmark Brent North Sea crude for October delivery was up 61 cents at 41.67 usd per barrel. New York's main October contract was up 53 cents at 44.45 usd in pre-market deals
"Prices are stronger on the back of hurricane Ivan, and jittery ahead of the OPEC meeting," said GNI-Man Financial trader Lee Eliott. In reference to the Vienna meeting, where OPEC is also expected to review its oil price band, Sucden analysts said: "Signs are emerging that the group could resist calls to raise official output limits to legitimise actual production, which is running approximately 1.5 mln bpd above the existing (quota) ceiling." Ali al-Nuami, oil minister of OPEC kingpin Saudi Arabia, said overnight that his government is not in favour of raising either OPEC's official production rate or the 22-28 usd price band
He also said Saudi is against a 40 usd price tag on oil, but that there is little the cartel can do to reduce prices if speculators are determined to drive the market higher
GNI-Man Financial's Elliot said speculation over Wednesday's US inventory data are also exerting upward pressure on prices
"For the last few weeks traders have been waiting for a big build in (US) crude (stocks), but we've just not seen it." "Inventories have already been affected by hurricanes Bonnie and Charley, and now we can only imagine what Ivan will do," he added. The Miami-based National Hurricane Centre said Ivan remains a category 5 hurricane, with wind speeds of up to 160 mph. "It is not surprising that Shell and BP have got people off oil rigs and shut down production," said Elliot
Also boosting prices were reports of fresh sabotage on Iraq's northern pipeline
A spokesman for the Iraqi military said the oil export artery was hit 60 km west of Kirkuk. There was no immediate confirmation of the attacks from the North Oil Co
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