Global Arab Network | Oil going up - OPEC prices over pb

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Oil going up - OPEC prices over $73pb

Global Arab Network - - George Haddad

Friday, 16 October 2009 12:43

Organization of the Petroleum Exporting Countries (OPEC) announced Friday that its crude oil basket was up by USD 1.24 per barrel yesterday reaching USD 73.20 pb compared to USD 71.96 pd the day before.

The basket annual price for last year was at USD 95.45 pd, it said.

The OPEC basket of crudes is currently made up of Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

OPEC's report issued in October expected a rise in demand estimated at USD 28.39 bpd in 2010, that is 300,000 higher than what previous reports predicted.

Observers say the cold weather in Europe and the US reports about the global economic recovery are to account for the rise in demand.

The latest report issued by OPEC expected a further rise in demand by 700, 000 bpd, with a rise of 200,000 bpd.

The organization which accounts for two thirds of the global production of oil decided last September to stick with the production of 25.5 million bpd.

OPEC has cut its production to 4.2 million bpd since September, whereas the first cut which was at 2,2 million bpd was effected in January.

Prices have climbed steadily in recent trading sessions, buoyed by a weak dollar that has bolstered investor risk appetite for hard assets such as oil.

New York's main contract, light sweet crude for November delivery, hit 78.17 dollars a barrel in Asian trading hours -- the highest level since October 14, 2008 -- after official data showed a pick-up for US gasoline demand.

It later pulled back to stand at 77.33 dollars, down 23 cents compared with Thursday's closing level.

Brent North Sea crude for December delivery dropped 40 cents to 75.83 dollars a barrel in early London trade on Friday.

"Crude prices were trading a little lower ... due to profit taking," said Sucden Financial Research analyst Nimit Khamar.

"The recent price rise has been very impressive and markets could well test 80 dollars but in our opinion a correction next week is the likely scenario to back below 75 dollars and even to the low 70s given oil fundamentals remain poor, global inventories are still high and demand recovery is far from convincing."

A US government report published on Thursday showed gasoline, or petrol, stocks fell by 5.2 million barrels in the country last week. Analysts polled by Dow Jones Newswires had expected a rise of 700,000 barrels.

The fall in gasoline stocks indicates rising demand and tightening supplies, supporting prices, traders said.

US crude reserves meanwhile rose by 400,000 barrels last week, lower than most analysts' expectations for a gain of 600,000 barrels.

Despite signs of a demand pick-up appetite for oil has plunged amid the world economic downturn, the most severe since the 1930s.

Oil prices tumbled from historic highs of more than 147 dollars in July 2008 to about 32 dollars in December because of the global recession but have since won back ground on recovery hopes. (AFP, KUNA, OPEC)

Global Arab Network

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