Crude prices slip as OPEC speaks out
Crude oil prices fell today and closed almost $2/barrel lower as The Organization of Petroleum Exporting Countries (OPEC) spoke out and dollar rebounded against most of its rival currencies barring the yen. Prices fell after OPEC said that it might consider increasing output in its forthcoming meeting, either this month or the one in December.
For the day ending Monday, 12 November, 2007, crude-oil futures for light sweet crude for December delivery closed at $94.62/barrel (lower by $1.7/barrel or 1.8%) on the New York Mercantile Exchange. Prices rose to $98.62/barrel during intra day trading on 7 November, 2007. Oil prices had rose 16% in October, 2007, the biggest one-month gain since September 2004.
Brent crude oil for December settlement fell $1.2 (1.3%) to $91.98 on the London-based ICE Futures Europe exchange.
As per reports, Saudi Arabia’s oil minister had commented that OPEC, will discuss increasing production at its next meeting later this year. OPEC heads of state are reported to gather in Riyadh for a summit this weekend. The next scheduled OPEC policy meeting is on 5 December in Abu Dhabi.
In the currency market today, the dollar rebounded against most of its major foreign-exchange counterparts, but slipped against the yen. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, rose 0.8% at 76.02. The yen gained against 16 of the most-traded currencies, climbing to an 18-month high against the dollar, as investors retreated from carry trades.
Only natural gas gains in the energy market
Natural gas in New York rose on an outlook that lower temperatures are moving into key consuming regions, boosting demand for heating. Gas for December delivery rose 6.4 cents (0.8%) to settle at $7.691 per million British thermal units
Against this backdrop, December reformulated gasoline fell 2% to $2.4075 a gallon, and December heating oil dropped 1.7% at $2.5750 a gallon.
At the MCX, crude oil for November delivery closed at Rs 3715/barrel, lower by Rs 56 (1.5%) against previous day’s close. Natural gas closed at Rs 309.7/mmtbu as against previous close of Rs 319.4/mmtbu, lower by Rs 10/ mmtbu.
OPEC has planned to boost daily oil production by 500,000 barrels. OPEC's production target is 27.2 million barrels a day, beginning 1 Nov. OPEC, has decided to raise their daily output by 500,000 barrels per day, starting 1 November.
Attacks on oil facilities in Middle East and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.