Oil price rise stalls

A sharp rally in oil prices to near-record peaks has stalled after Opec member Nigeria has said the cartel may raise output later this month to cool the red-hot market.

    Opec is likely to increase production to keep price in check

    US light crude was off 7 cents to $53.50 a barrel, after dropping as low as $52.90. A rally that started at midweek had prices briefly within 50 cents of last October's $55.67 record.
       
    London Brent crude fell 30 cents to $51.65 a barrel after hitting $53.00 on Thursday, its highest price in 17 years of trade on the International Petroleum Exchange.
       
    Nigeria's presidential adviser on petroleum, Edmund Daukoru, said that members were eager to prevent high prices from damaging world economic growth and could agree to raise quotas or relax compliance.
       
    "I can see two potential outcomes: that discipline would be relaxed so everybody could really do close to their available potential, except Saudi Arabia. We may, on the other hand, take a definite increase in production, in quota," Daukoru said. 

    Daukoru added that Nigeria continued to favour a US oil price between $45 and $55 a barrel, but that a sustained price above $55 would harm global economic growth.

    Opec will meet in Iran on 16 March.

    Caution urged


       
    Many Opec ministers are wary of boosting output before an expected seasonal decline in post-winter demand, fearing that a hefty increase in consumer inventories could weaken prices.

    President Hugo Chavez does not
    favour an output increase

    Venezuelan President Hugo Chavez said on Friday Opec did not need to increase production when it met later this month. "We are producing enough. The increase in prices has nothing to do with Opec ," he said.
       
    Analysts said that despite the calmer market, a fresh bull rally could be around the corner. 

    "In my opinion we are going to see higher prices than we have seen, but the market is taking a breather," said John Brady at ABN Amro in New York.
       
    "It raced up there and probably got a little ahead of itself. I would think usually with a kind of reversal like that, on very good volume, it would usually indicate a day or two days of potential weakness," he added.
       
    Acting Opec Secretary-General Adnan Shihab al-Din said on Thursday that a supply disruption in already tight markets could push prices as high as $80 over the next two years.

     

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    The Muslims of South Korea

    The Muslims of South Korea

    The number of Muslims in South Korea is estimated to be around 100,000, including foreigners.

    Gender violence in India: 'Daughters are not a burden'

    Gender violence in India: 'Daughters are not a burden'

    With female foeticide still widespread, one woman tells her story of being mutilated for giving birth to her daughters.

    Zimbabwe: What's happening?

    Zimbabwe: What's happening?

    Situation tense as thousands march in Harare to call for Robert Mugabe's resignation days after military takeover.