Nigeria and Venezuela last week pledged to cut supply by about 170,000 barrels per day from October 1 -- less than 1 percent of OPEC's total output. Stocks of distillates in the United States are at a seven-year high.
"The fundamentals are not very rosy -- we've got very high stocks," said Olivier Jakob of Petromatrix. "The market is expecting now to have a bit less production from OPEC, but the question is how much."
U.S. crude
Oil in New York has picked up from a fall to a six-month low below $60 early last week, even though other OPEC members, including top world exporter Saudi Arabia, have not announced any move to trim supply.
Some traders said the planned cutbacks by Nigeria and Venezuela would have little impact on prices unless larger producers in the Organization of the Petroleum Exporting Countries also said they would join the move.
"The only significant thing would be if Saudi Arabia announced they were going to cut output, which they haven't," said Christopher Bellew, a broker at Bache Financial in London.
"I really don't think anyone expects much in the way of output cuts at the moment."
OPEC's second-largest producer, Iran, on Sunday backed any move by the 11-member group to bolster the market, while stopping short of saying it would trim its own output.
Iran will support any OPEC move to bring oil prices back to an "acceptable and logical" level, Iran's OPEC Governor Hossein Kazempour Ardebili told Iran's official news agency IRNA.
INVENTORIES HIGH
Oil has also been under pressure from brimming U.S. inventories. Stocks of distillates stood at 151.3 million barrels in the week ended September 22, highlighting ample supply of winter heating fuel.
"We've got high stocks and a lot of weather forecasts have been for a mild start to the winter," Bellew said. "People may be disappointed on the demand side in the next two to three months."
Recent weak economic data has also raised doubts about the sustainability of economic growth in the United States, the world's top oil consumer, in late 2006 and early next year.
Still, Goldman Sachs said it expected robust demand to last into the fourth quarter.
Combined with a drop in gasoline production and an expected decrease in gas imports, the bank said oil prices should find support until the end of this year.
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