Oil Reverses Some Gains in Profit Taking
August 8, 2000 - 0:0
LONDON Oil prices eased on Monday, reversing some of the sharp gains made last week when worries reemerged about low fuel inventories in the United States.
London Brent blend Futures were off 47 cents at $28.90 a barrel after climbing $2 last week. U.S. light crude was off 23 cents at $29.65. Dealers attributed the declines to profit taking.
Oil shot up last week after weekly data showed a nine-million-barrel fall in U.S. crude oil stocks, leaving inventories 41 million barrels or 13 percent lower than a year ago.
Brent hit a peak of $31.40 in mid-June before easing to less than $27 a week ago.
Doubts also emerged last week as to whether leading OPEC producer Saudi Arabia would fulfill a promise to supply another 500,000 barrels daily to the 76 million bpd world market.
Riyadh has remained silent since announcing in early July that it would add the extra crude to push prices down toward its target of $25 a barrel.
Industry sources familiar with Saudi policy said shortly afterward that another 250,000 bpd was coming in August followed by the same amount again in July.
But some major customers said last week that the kingdom appeared to be curtailing some of the incremental production.
"There's a lot of uncertainty about the exact Saudi position," a senior trader at a large European oil company said on Monday.
"They're adding barrels but no one knows for sure by how much." A Reuters survey of OPEC output put Saudi at 8.44 million barrels a day in July, taking it nearly 200,000 bpd above its official quota for the month.
Overall OPEC output rose 130,000 bpd to 28.3 million with production from 10 members that have official quotas up 210,000 bpd to 25.81 million 410,000 bpd in excess of the official limit of 25.4 million.
Traders were bracing for more developments from OPEC this week from the sidelines of a tour by Venezuelan President Hugo Chavez in preparation for September's summit of OPEC heads of state in Caracas.
OPEC President Ali Rodriguez, the Venezuelan oil minister, accompanies Chavez on the 10-country tour which includes a stop in Saudi Arabia on Monday and Tuesday.
For reasons of protocol Riyadh is thought unlikely to make any further public announcements on output policy during Chavez's tour.
Officially the cartel will not raise output until a basket of its crudes stays above $28 for 20 consecutive days. The basket was priced at $27.35 on Friday.
(Reuter)
London Brent blend Futures were off 47 cents at $28.90 a barrel after climbing $2 last week. U.S. light crude was off 23 cents at $29.65. Dealers attributed the declines to profit taking.
Oil shot up last week after weekly data showed a nine-million-barrel fall in U.S. crude oil stocks, leaving inventories 41 million barrels or 13 percent lower than a year ago.
Brent hit a peak of $31.40 in mid-June before easing to less than $27 a week ago.
Doubts also emerged last week as to whether leading OPEC producer Saudi Arabia would fulfill a promise to supply another 500,000 barrels daily to the 76 million bpd world market.
Riyadh has remained silent since announcing in early July that it would add the extra crude to push prices down toward its target of $25 a barrel.
Industry sources familiar with Saudi policy said shortly afterward that another 250,000 bpd was coming in August followed by the same amount again in July.
But some major customers said last week that the kingdom appeared to be curtailing some of the incremental production.
"There's a lot of uncertainty about the exact Saudi position," a senior trader at a large European oil company said on Monday.
"They're adding barrels but no one knows for sure by how much." A Reuters survey of OPEC output put Saudi at 8.44 million barrels a day in July, taking it nearly 200,000 bpd above its official quota for the month.
Overall OPEC output rose 130,000 bpd to 28.3 million with production from 10 members that have official quotas up 210,000 bpd to 25.81 million 410,000 bpd in excess of the official limit of 25.4 million.
Traders were bracing for more developments from OPEC this week from the sidelines of a tour by Venezuelan President Hugo Chavez in preparation for September's summit of OPEC heads of state in Caracas.
OPEC President Ali Rodriguez, the Venezuelan oil minister, accompanies Chavez on the 10-country tour which includes a stop in Saudi Arabia on Monday and Tuesday.
For reasons of protocol Riyadh is thought unlikely to make any further public announcements on output policy during Chavez's tour.
Officially the cartel will not raise output until a basket of its crudes stays above $28 for 20 consecutive days. The basket was priced at $27.35 on Friday.
(Reuter)