Sun, Mar 05, 2006 - Page 10 News List

Oil prices steady ahead of crucial Vienna meetings


World oil prices steadied on Friday as traders eyed two crucial meetings in Vienna next week, dealers said.

New York's main contract, light sweet crude for delivery in April, firmed US$0.31 to close out the week at US$63.67 a barrel.

In London, the price of Brent North Sea crude for April delivery finished up US$0.11 at US$64.18 a barrel.

"I think you had some people squaring positions ... a little bit leery about holding shorts in front of the IAEA testimony," AG Edwards analyst Bill O'Grady said, describing trading as "pretty slow."

Tomorrow in the Austrian capital, the International Atomic Energy Agency (IAEA) meets to ponder whether to recommend UN sanctions against Iran over its disputed nuclear program.

Then on Wednesday, also in Vienna, OPEC is to hold its latest meeting to set production levels.

"Concerns over the potential for fresh disruption to supply in Nigeria and a heightened sensitivity to Iran's nuclear ambitions as Monday's IAEA meeting looms" supported prices, Barclays Capital analyst Kevin Norrish said.

Iran, the second-biggest producer in OPEC after Saudi Arabia, is accused by Western powers of seeking nuclear weapons under cover of a civilian energy program.

No agreement was reached on Friday among Iran, France, Germany and the UK during last-ditch talks in Vienna aimed at allaying the nuclear fears.

"Despite Iran's claim otherwise, there is a good chance they will halt oil exports if sanctions are imposed on them," Sucden analysts said.

In Nigeria, an OPEC member and Africa's biggest crude producer, lingering supply concerns provided further support to the market. Recent unrest has slashed Nigeria's total crude output by some 20 percent, while separatist militants have threatened further strikes against foreign oil companies in the Niger Delta.

Owing to high oil prices, most analysts expect the OPEC cartel to maintain its current production quota of 28 million barrels per day, despite some disagreement among member nations.

Venezuela will ask the OPEC cartel next week to cut oil production by between 500,000 and one million barrels per day, Energy Minister Rafael Ramirez was quoted as saying.

Speaking during a visit to Washington, OPEC's Nigerian president Edmund Daukoru said the group would review the recent surge in prices when it debates its next move, but would not be drawn on whether it will cut output.

"Every minister has something to say. It's too early to talk about consensus," he told reporters, after Kuwait's energy minister Sheikh Ahmad Fahd al-Sabah last month suggested the market may be oversupplied and that an OPEC cut may be on the table.

Daukoru said OPEC was currently producing a surplus of about two million barrels per day, but that short-term volatility was still driving crude prices higher.

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