Oil prices up on cuts by 2 Opec nations
Ap, London
Oil prices fluttered around $63 a barrel Monday as traders worried about whether production cuts by two key producing nations were harbingers of further restrictions by other Opec members.On Friday, Venezuela said it would reduce oil output by 50,000 barrels a day to try to stem the recent fall in crude prices. Nigeria on Saturday said it was cutting oil exports by 5 percent, which the state-owned oil company described as a routine seasonal reduction. By midday in Europe, light, sweet crude for November delivery rose 7 cents to $62.95 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 15 cents on Friday to settle at $62.91 a barrel. November Brent crude on the ICE futures exchange in London rose 10 cents to $62.58 a barrel. Heating oil futures gained 0.082 cents to $1.7617 per gallon while gasoline prices added 0.66 cent to $1.5605 a gallon. Natural gas futures fell 3.4 cents to $5.586 per 1,000 cubic feet. Petromatrix analyst Olivier Jakob said speculation about Opec cuts urged prices higher, while the market was "torn between the macro players wanting to be long on Opec policy and the micro players wanting to be short on the ever deteriorating fundamentals." While the 11-member Organization of Petroleum Exporting Countries decided earlier this month to hold to a 28 million barrel a day output quota, many traders say the group would like to rein in production if crude-oil futures drop much lower than $60 a barrel. "The market seems to have reached a floor in the low-$60s due to the widespread feeling among traders that Opec may be galvanized to control output or cut production if prices are below $60 a barrel," said Victor Shum, an analyst with Purvin & Gertz in Singapore. The cuts announced by Nigerian National Petroleum Corp. take 115,000 barrels of crude oil a day from Nigeria's current Opec quota of 2.3 million barrels daily. The reduction was to begin on Sunday. Refiners often decrease their output to conduct maintenance during the slow season. Venezuela, a major oil supplier to the U.S. and a founding member of Opec, is already thought to be producing well below its Opec quota around 2.5 million barrels a day instead of the 3.2 million barrels it reports to the cartel.
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