Oil prices make fresh assault on 100 dollars, then slide
LONDON (AFP) — Oil prices breached 99 dollars a barrel Monday as the markets fretted over tight crude supplies globally, before sliding on profit-taking amid rumours that OPEC may decide to increase output.
New York's main contract, light sweet crude for January delivery, struck as high as 99.11 dollars, not far off its record high of 99.29.
At about 1600 GMT, the contract stood at 96.80 dollars a barrel, down 1.38 dollars from Friday's close.
London's Brent North Sea crude for January delivery hit an historic peak of 96.55 dollars early on Monday. However it later stood at 95.10 dollars a barrel, a loss of 66 cents.
"We believe the markets have yet to discount the outcome of the OPEC meeting on December 5, where there will be immense -- and we believe ultimately successful pressure -- on the cartel to raise quotas," MF Global analyst Ed Meir said.
Iran, a key member of the Organization of Petroleum Exporting Countries, said over the weekend that the country could pump more if required.
"We believe there is enough oil in the market but if statistics and data show there is a need to produce more we are capable of meeting the demand," Gholam Hossein Nozari told a news conference in Tehran.
When asked whether Iran agreed with a possible decision to increase OPEC output, he said "we are studying it and will give our opinion."
But he added that any hike "should be in final agreement with other members" of the 13-member cartel, whose oil ministers meet in Abu Dhabi next month.
OPEC last decided to raise output in September when it agreed to provide an extra 500,000 barrels of crude a day to the market, which was made effective from November 1.
Despite pressures from developed countries, no decision on oil production was made at a rare OPEC summit last week.
Although some OPEC ministers expressed concern that expensive crude would eventually dampen demand for oil, they indicated that blame for the near triple-figure price lay outside the cartel.
David Moore, a commodity strategist with the Commonwealth Bank of Australia, said Monday that the oil market was "fundamentally tight". He added that OPEC's output decision was important whatever the outcome.
"That will be very important no matter what the decision is," he said. "The decision is an important one for the oil market in terms of the perceived balance between demand and supply."
On Monday, some dealers blamed initial high prices on US government data showing that energy stockpiles had fallen more heavily than expected.
Earlier this month, US reserves of distillates -- including crucial heating fuel and diesel -- had also fallen more than forecast.
Heating fuel demand is expected to pick up as the northern hemisphere winter kicks in next month. The US northeast region is the world's biggest user of heating oil.
The price of oil has surged by about 64 percent since the start of 2007, also supported by supply disruptions in key producers such as Nigeria, strong demand from China and India, and jitters over the Iranian nuclear crisis.
