Oil prices retreat amid Opec hint on raising output

World oil prices slid yesterday after reports that Opec could raise its crude output amid near record-high energy prices, analysts said.

New York’s main oil futures contract, light sweet crude for delivery in September, sank 90¢ to close at $74.89 per barrel. On Friday, the previous contract, for August delivery, climbed to $76.13, its highest level since August 9, 2006.
In London, Brent North Sea crude for September delivery dropped 78¢ to settle at $75.86 a barrel.

“The market fell under pressure from comments by Opec President and UAE Energy Minister Mohamed al-Hamli, who said on Sunday that oil’s strength and near-record prices are of concern and that the group is prepared to pump more oil if needed,” Sucden analyst Michael Davies said.

“In addition, the head of Opec research said that a fair price for producers and consumers is around $60-65 per barrel. This statement was a first indication that the group is prepared to do something about rising crude prices.”

Mike Fitzpatrick of Man Financial said: “Opec targeting $60 to 65 per barrel oil prices as fair to both consumers and producers may also be encouraging more traders to book profits.”

Opec is scheduled to meet on September 11 in Vienna, Austria, home to the 11-nation group’s headquarters.

Under rising demand, geopolitical tensions and infrastructure problems, oil is commanding high prices not seen for nearly a year, luring speculators who are pushing prices ever skyward.

In the past month, crude prices have climbed about $7 in London and $5 in New York.
On Friday, oil prices dipped as traders paused for profit-taking in the heated rally. Still, yesterday, Brent was within striking distance of its record high of $78.64 a barrel.

The historic peak was struck on August 7, 2006 after a pipeline spill forced British firm BP to close production at Prudhoe Bay, the biggest oil field in the US.
New York crude has some ground to go before reaching its all-time high of $78.40 a barrel, set on July 13, 2006.

AFP