Crude oil was little changed in New York after rising yesterday on plans by six of the Organization of Petroleum Exporting Countries to cut output to stem a decline in prices.
Oil gave up much of yesterday's gain after OPEC said it won't meet to formalize the 1-million barrel a day cut agreed by Saudi Arabia, Libya, Algeria, Kuwait, Venezuela and Nigeria. A U.S. government report later this week will probably show oil stockpiles in the world's biggest consumer rose for a second week amid slowing demand, according to a survey of analysts.
``The market rallied higher on the OPEC news but wasn't able to close above $60,'' said Mike Sander, a commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``The crude oil market still looks bearish and seasonally it's still in a down-trend.''
Crude oil for November was at $59.88 a barrel, down 8 cents, in after-hours electronic trading on the New York Mercantile Exchange at 8:02 a.m. in Sydney.
The contract rose as much as 2.6 percent to $61.30 yesterday, a one-week high, after OPEC announced the output cut. Prices closed at $59.96, a 20-cent gain, after a spokesman for OPEC president Edmund Daukoru said the group won't meet to formalize the voluntary cuts.
``The rally was aborted on the statements from Daukoru's office,'' John Kilduff, vice president of risk management at Fimat USA in New York, said yesterday. ``To the extent OPEC doesn't have its act together, any gains will be forfeited and the trend lower will resume.''
OPEC Output
OPEC produces about 40 percent of the world's oil and pumped 29.64 million barrels a day in September, down from 29.8 million barrels a day in August, according to Bloomberg News estimates. The planned reduction represents a 3.4 percent cut from last month.
``I think OPEC is serious,'' Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago, said yesterday. ``There are fears that if prices fall too much further they'll be unable to stanch the decline.''
Oil futures reached their all-time high of $78.40 on July 14 on concern that fighting in Lebanon between Israel and the Islamic militia Hezbollah, which was supported by Iran, would spread through the Middle East. Prices touched $57.75 a barrel on Oct. 4, the lowest since Feb. 16.
Yesterday's rally was supported by concern North Korea's claim to have tested a nuclear weapon may heighten tensions in northern Asia. U.S. President George W. Bush yesterday condemned North Korea for its ``provocative'' announcement and urged the United Nations to take quick, decisive action.
North Korea
``The North Korean news won't have any effect on oil supplies but is helping push prices higher,'' Frank Verrastro, director of the Center for Strategic and International Studies energy program in Washington, said yesterday. ``Prices rose to records on Hezbollah and that didn't have any impact on supply either.''
Oil prices have fallen 19 percent the past two months as U.S. oil and fuel stockpiles rose and demand eased with the passing of the summer vacation driving season.
Average U.S. daily demand for oil products fell 2.3 percent to 20.23 million barrels a day in the week ended Sept. 29, the lowest in seven months and the sixth straight decline, according to Energy Department data.
The nation's crude oil inventories held 328.1 million barrels at that date, 13 percent above the five-year average for the period, the department said.
Stockpiles probably gained another 1.5 million barrels last week, according to a Bloomberg News survey of 11 analysts.
Oil gave up much of yesterday's gain after OPEC said it won't meet to formalize the 1-million barrel a day cut agreed by Saudi Arabia, Libya, Algeria, Kuwait, Venezuela and Nigeria. A U.S. government report later this week will probably show oil stockpiles in the world's biggest consumer rose for a second week amid slowing demand, according to a survey of analysts.
``The market rallied higher on the OPEC news but wasn't able to close above $60,'' said Mike Sander, a commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``The crude oil market still looks bearish and seasonally it's still in a down-trend.''
Crude oil for November was at $59.88 a barrel, down 8 cents, in after-hours electronic trading on the New York Mercantile Exchange at 8:02 a.m. in Sydney.
The contract rose as much as 2.6 percent to $61.30 yesterday, a one-week high, after OPEC announced the output cut. Prices closed at $59.96, a 20-cent gain, after a spokesman for OPEC president Edmund Daukoru said the group won't meet to formalize the voluntary cuts.
``The rally was aborted on the statements from Daukoru's office,'' John Kilduff, vice president of risk management at Fimat USA in New York, said yesterday. ``To the extent OPEC doesn't have its act together, any gains will be forfeited and the trend lower will resume.''
OPEC Output
OPEC produces about 40 percent of the world's oil and pumped 29.64 million barrels a day in September, down from 29.8 million barrels a day in August, according to Bloomberg News estimates. The planned reduction represents a 3.4 percent cut from last month.
``I think OPEC is serious,'' Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago, said yesterday. ``There are fears that if prices fall too much further they'll be unable to stanch the decline.''
Oil futures reached their all-time high of $78.40 on July 14 on concern that fighting in Lebanon between Israel and the Islamic militia Hezbollah, which was supported by Iran, would spread through the Middle East. Prices touched $57.75 a barrel on Oct. 4, the lowest since Feb. 16.
Yesterday's rally was supported by concern North Korea's claim to have tested a nuclear weapon may heighten tensions in northern Asia. U.S. President George W. Bush yesterday condemned North Korea for its ``provocative'' announcement and urged the United Nations to take quick, decisive action.
North Korea
``The North Korean news won't have any effect on oil supplies but is helping push prices higher,'' Frank Verrastro, director of the Center for Strategic and International Studies energy program in Washington, said yesterday. ``Prices rose to records on Hezbollah and that didn't have any impact on supply either.''
Oil prices have fallen 19 percent the past two months as U.S. oil and fuel stockpiles rose and demand eased with the passing of the summer vacation driving season.
Average U.S. daily demand for oil products fell 2.3 percent to 20.23 million barrels a day in the week ended Sept. 29, the lowest in seven months and the sixth straight decline, according to Energy Department data.
The nation's crude oil inventories held 328.1 million barrels at that date, 13 percent above the five-year average for the period, the department said.
Stockpiles probably gained another 1.5 million barrels last week, according to a Bloomberg News survey of 11 analysts.
Post a Comment