Print

Mail

wiki links

Oil prices nearing US$100 amid fears of OPEC cut

World oil prices eased in Asian trade yesterday, but shadowed US$100 per barrel after peaking to fresh record levels overnight amid speculation OPEC would cut crude output, dealers said.

In afternoon trade, New York's main contract, light sweet crude for delivery in March, was down US$0.75 to US$99.26 per barrel.

The contract soared to an all-time intraday high of US$100.10 before closing up US$4.51 at a record US$100.01 on the New York Mercantile Exchange.

London's Brent North Sea crude for April delivery fell US$0.91 to US$97.65, after settling at US$98.56 per barrel, a gain of US$3.65 on Tuesday.

The contract had earlier jumped to a record high of US$98.70 before settling.

Analysts said there was growing speculation that OPEC, which supplies about 40 percent of the world's oil, would cut output at its March 5 meeting in Vienna.

"When and how the oil is cut is the key factor here," said Darius Kowalczyk, a senior investment strategist at CFC Seymour Securities in Hong Kong.

"I do not think oil reaching the US$100 mark can be fully justified. It is not a big deal as demand is still on the decline," he said.

Earlier this month, OPEC left its official daily output ceiling at 29.67 million barrels of oil.

Iran on Sunday declined to rule out that OPEC would cut production at its next meeting early next month, a move vehemently opposed by oil-consuming countries.

OPEC is expected to cut output to prevent an oversupply as demand eases off in the northern hemisphere with the end of the winter season, Kowalczyk said.

Another factor supporting prices was the ongoing row between oil-rich Venezuela and US energy behemoth ExxonMobil, the world's biggest oil company.
This story has been viewed 559 times.