Oil Prices Stage Late Rally Before Holiday
May 2, 1998 - 0:0
LONDON World oil prices gained on Thursday but the technically-inspired advances looked precarious against a backdrop of stubborn global oversupply, dealers said. World Benchmark North Sea Brent Blend settled 21 cents up at $14.46 a barrel on the London Futures Market, just two cents off the high. Dealers said the gains were driven by a perception in U.S. markets that crude was oversold, triggering a corrective rally.
The rally in the last 20 minutes of trade derived momentum from some dealers rushing to settle trading positions before a long holiday weekend. Dealers saw no news that influenced the rally, shrugging off a statement by U.S. President Bill Clinton that he was encouraged by Iraqi cooperation with some UN weapons inspections. Clinton added at a news conference he was waiting for the Pentagon to recommend a reduction in U.S. forces in the Persian Gulf. If Iraq continued to cooperate, the United Nations might be able to certify compliance on its nuclear weapons programs by October, he added.
Calls by OPEC members this week for world producers to make further reductions in output of up to one million barrels of oil per day appeared to have been factored into a market unwilling to show bullishness in the absence of substantiated evidence. We now need to see the cuts actually happening. I think it (OPEC output cut calls) are pretty much factored into the market by now.
We were looking for an excuse to move higher and the news gave us that chance, said one trader on the London Futures Market. OPEC technical experts have scheduled to meet in Vienna on June 15 to discuss the market situation ahead of the producer group's summer ministerial conference nine days later. The Economic Commission Board, which draws representatives from each of OPEC's 11 member countries, recommends future action to OPEC ministers based on world supply, demand and output figures.
Some market watchers were awaiting Iraqi reaction to the continuation of UN sanctions against Baghdad and anticipated some trouble that could bolster oil prices. The Iraqis have been making some unhappy noises recently. If there is a standoff like the last one over the inspection of sites, then we're probably looking at a firmer market, said one trader. Iraq's Deputy Prime Minister Tareq Aziz on Wednesday accused UN arms inspectors of treating President Saddam Hussein's compounds as if they were normal sites, allowing themselves the right of access to them as an absolute right to be exercised without any regard for special procedures agreed with Secretary-General Kofi Annan. In a letter to Annan, the Iraqi minister did not threaten to cut off access to the eight presidential sites that nearly caused a bombing raid by the United States and Britain, but appeared to be building a case to limit the visits.
(Reuter)
The rally in the last 20 minutes of trade derived momentum from some dealers rushing to settle trading positions before a long holiday weekend. Dealers saw no news that influenced the rally, shrugging off a statement by U.S. President Bill Clinton that he was encouraged by Iraqi cooperation with some UN weapons inspections. Clinton added at a news conference he was waiting for the Pentagon to recommend a reduction in U.S. forces in the Persian Gulf. If Iraq continued to cooperate, the United Nations might be able to certify compliance on its nuclear weapons programs by October, he added.
Calls by OPEC members this week for world producers to make further reductions in output of up to one million barrels of oil per day appeared to have been factored into a market unwilling to show bullishness in the absence of substantiated evidence. We now need to see the cuts actually happening. I think it (OPEC output cut calls) are pretty much factored into the market by now.
We were looking for an excuse to move higher and the news gave us that chance, said one trader on the London Futures Market. OPEC technical experts have scheduled to meet in Vienna on June 15 to discuss the market situation ahead of the producer group's summer ministerial conference nine days later. The Economic Commission Board, which draws representatives from each of OPEC's 11 member countries, recommends future action to OPEC ministers based on world supply, demand and output figures.
Some market watchers were awaiting Iraqi reaction to the continuation of UN sanctions against Baghdad and anticipated some trouble that could bolster oil prices. The Iraqis have been making some unhappy noises recently. If there is a standoff like the last one over the inspection of sites, then we're probably looking at a firmer market, said one trader. Iraq's Deputy Prime Minister Tareq Aziz on Wednesday accused UN arms inspectors of treating President Saddam Hussein's compounds as if they were normal sites, allowing themselves the right of access to them as an absolute right to be exercised without any regard for special procedures agreed with Secretary-General Kofi Annan. In a letter to Annan, the Iraqi minister did not threaten to cut off access to the eight presidential sites that nearly caused a bombing raid by the United States and Britain, but appeared to be building a case to limit the visits.
(Reuter)