World oil prices strike fresh records
NEW YORK, Feb 26, 2008 (AFP) — World oil prices struck fresh record highs in New York and London in Tuesday trading amid fears of declining OPEC oil output ahead of the cartel's looming meeting next week, traders said.
New York's main oil futures contract, light sweet crude for delivery in April, closed up 1.65 dollars at a record 100.88 dollars a barrel.
Although the contract finished on a new high, it hit a record 101.32 dollars during intra-day trading on February 20.
In London meanwhile, the Brent North Sea benchmark oil contract hit a record 99.75 dollars before settling up 1.78 dollars at 99.47 dollars as worries about OPEC's production reverberated in Europe.
"Some underlying strength (was) coming in ... on the news that OPEC appears to have reduced output for the month of February, based on a Petrologistics report," said MF Global analyst John Kilduff.
New York prices of 101 dollars reflect widespread market expectations of a production cut by the OPEC crude producers' group, OPEC president Chakib Khelil said in a statement to the Algerian press on Monday.
Khelil indicated that the 13-nation Organization of the Petroleum Exporting Countries would not increase production at a meeting on March 5 in Vienna, Austria, signaling output could be held steady or reduced.
"Either we hold (output) steady or we cut in order to restore market balance and stability," Khelil said.
"Supply is sufficient and it is clear that with an expected drop in consumption over the next six months, we cannot envisage a production hike."
Supply worries were meanwhile stoked by fresh concerns in Nigeria, Africa's biggest oil producer, where production has been blighted by unrest for some time.
"In Nigeria, the ruling that their presidential election was in fact fair and democratic helped renew worries ... in terms of the situation there overall and in Nigeria oil production," said Kilduff.
A Nigerian court Tuesday upheld the April 2007 election of Umaru Yar'Adua as president, dismissing two opposition petitions requesting a re-run on grounds of electoral fraud.
Nigeria's 2007 elections -- presidential, legislative and state governorship -- were marred by serious fraud countrywide, according to virtually all the poll watchers that monitored them.
Prices also rose on the back of Turkey's ongoing offensive in northern Iraq, traders said.
Prime Minister Recep Tayyip Erdogan on Tuesday defended Turkey's military offensive against Kurdish rebel bases in oil-producing northern Iraq.
Turkish forces stormed into northern Iraq on Thursday to flush out an estimated 4,000 Kurdistan Workers Party (PKK) rebels Ankara says use the autonomous region as a springboard for their campaign in southeast Turkey.
Iraq's northern oil fields are connected to the Turkish Mediterranean port of Ceyhan by a pipeline that crosses the two countries' border in northern Iraq's autonomous Kurdish region.
"Overall, oil prices have always been very vulnerable to various supply side shocks and geopolitical tensions," said Sucden analyst Andrey Kryuchenkov.
The weak dollar also boosted prices because it makes commodities that are priced in the US unit cheaper for buyers using stronger currencies, which tends to encourage demand, traders said.
