Monday March 22 2:36 AM ET
Oil Market Cheers
By Neil Fullick
SINGAPORE (Reuters) - Crude prices in Asia were stronger Monday, as OPEC appeared ready to quickly ratify an agreement to cut world supplies by more than
two million barrels per day (bpd).
Further price support came from a halt in the Iraq-Turkey pipeline, the main export route for Iraq's oil to the West.
''There's little news about the pipeline, but it's definitely helping the market. At OPEC, it seems like everything will go ahead without a glitch,'' an oil broker said.
NYMEX April crude futures were last traded at 0700 GMT at $15.38 per barrel, up 14 cents from the New York close Friday.
May NYMEX crude was last traded at $15.50, up 14 cents.
Brent May crude futures, trading on the Singapore International Monetary Exchange were last traded at $13.67, up 22 cents from London Friday.
OPEC ministers over the weekend said they expected the oil cartel to quickly agree to cut 1.7 million barrels per day (bpd) of production, as part of a wider plan
signed in The Hague two weeks ago for world supply to be curtailed more than two million bpd.
''We are finished, it's all done,'' Kuwait oil minister Sheikh Saud Nasser al-Sabah said ahead of the meeting.
''It is concluded. There is nothing but solidarity,'' a senior Iranian official said.
OPEC is gathering in Vienna for a formal meeting Tuesday expected to ratify the Hague agreement. Most details had been settled and agreed ahead of the meeting,
oil industry sources said.
Ali al-Naimi, the oil minister of OPEC heavyweight Saudi Arabia, said he expected the latest agreement to cut supplies among world producers to finally drag the oil
market out of its worst crisis in more than 20 years.
''The reason that this one will probably succeed even more than previous resolutions is the fact that this decision is suggested and backed and directed by the highest
authority in every government that has participated in the decisions process,'' he told reporters.
Brent slumped to average just $13.34 per barrel last year, its worst performance in more than 20 years. That resulted in windfall gains for importers, but OPEC said
it lost more than $50 billion in revenues.
Further price support for oil came from news the pipeline through Turkey, which carries Iraqi crude for Western markets, was shut down following a bomb blast.
The blast in the southeast province of Mardin caused a large fire but limited damage, regional governor Fikret Guven said. The pipeline was closed for inspections
after the explosion.
Analysts have generally applauded the plan to cut supplies, so long as the often fractious OPEC can maintain production discipline, but have forecast it will take the
rest of 1999 for the market to work off its stock flab. |
