Wednesday March 24 3:22 AM ET
Oil Up As OPEC Squeezes Output
SINGAPORE (Reuters) - Oil prices rose in Asia Wednesday on news that
stocks of gasoline and distillates in the United States plunged last week.
Further hard evidence that OPEC was moving to make real production cuts,
added to the bullish sheen, traders said.
OPEC agreed overnight to cut 1.7 million barrels per day from April for
one year, taking the group's overall output cuts in the past year to 16 percent.
New York Mercantile (NYMEX) May crude futures were up 17 cents from the New York close,
at $15.68 per barrel at 0720 GMT.
May Brent futures on the Singapore International Monetary Exchange (SIMEX) were untraded
by 0710 GMT, but were bid at $13.80, up from the London close of $13.73.
The NYMEX rise partly countered the 23-cent loss during New York trading hours Tuesday,
even as the Organization of the Petroleum Exporting Countries announced its cut backs.
Traders said the OPEC news was bullish but had been widely expected ahead of time.
The longer term direction for prices would depend on evidence that real cuts were being made
by the often fractious and undisciplined cartel.
Asian traders said Wednesday they had received notices from Abu Dhabi National Oil Co
(ADNOC), which produces most crude in the United Arab Emirates (UAE), that April supplies
to South Korea, Japan and Taiwan would be cut up to 10 percent.
''We got a telex from Abu Dhabi informing us of a 10 percent cut in April volumes,'' one Korean
refinery told Reuters.
Saudi Arabia, the world's biggest oil exporter, had notified global customers earlier this week
about cuts in supply.
Non-OPEC Oman did the same, but said it would not cut supplies until May.
After oil markets in New York and London closed Tuesday, the American Petroleum Institute
(API) reported that gasoline and distillate stocks in the United States plunged more than nine
million barrels last week.
The draw was bigger than had been expected and helped add to the bullish tone of prices in
Asia. Crude stocks were up 823,000 barrels.
The U.S. Department of Energy will publish stock data later Wednesday.
dailynews.yahoo.com
Charles |
