|
Oil prices hover around 55 dollars Original Source Link: (May no longer be active)
http://abcnews.go.com/Business/wireStory?id=564148http://abcnews.go.com/Business/wireStory?id=564148
Oil Prices Stay Close to $55 a Barrel
Oil Prices Stay Close to $55 a Barrel on Weak Dollar, Cold Weather and OPEC Jitters
By GEORGE JAHN
The Associated Press
Mar. 9, 2005 - Crude futures stayed close to $55 a barrel Wednesday, anchored by a weak dollar, cold weather and jitters ahead of next week's meeting of the Organization of Petroleum Exporting Countries.
OPEC oil ministers have signaled they will not raise output a stance that analysts said was not surprising considering the organization already is producing over its quota.
And even a decision to boost production at the meeting in Iran on March 16 would come too late to compensate for the late outburst of winter in the Northern Hemisphere driving heating oil demand.
On the New York Mercantile Exchange, light, sweet crude rose 14 cents to $54.73 a barrel in electronic trading by late morning in Europe. Heating oil prices were up less than a cent at $1.5295 a gallon.
Brent crude was up 7 cents at $52.91 a barrel on the International Petroleum Exchange.
Ng Weng Hoong, oil editorial manager at Energyasia.com, said traders remain worried about the tight demand-supply situation.
"There's an element of panic buying going on here," he said. "Oil companies are under-replenishing their reserves."
The 10 OPEC countries bound by production quotas pumped an estimated 700,000 barrels a day last month above their joint 27 million barrel ceiling.
With the organization unlikely or unable to go much above that, "we need the weather to get warmer," said analyst Deborah White at SG Securities in Paris.
"OPEC cannot help that we're getting major snowstorms in the (U.S.) Northeast even if they had more capacity they can do nothing to put more heating oil in the Northeast instantaneously."
Also driving prices higher was the strong euro, which rose above $1.33, its highest level since early January.
Because crude is sold worldwide in U.S. dollars, and because the currency has lost 8 percent of its value against the euro in the last four months, OPEC nations have signaled support for higher oil prices as a hedge to maintain their buying power in Europe.
Several OPEC ministers have said they see no need to raise output.
"The most OPEC can do in Isfahan is roll over production for a short period and to have another extraordinary meeting," Iranian oil minister Bijan Zanganeh said in Tehran on Tuesday.
Venezuela, Qatar and Algeria have all come out against raising output, and OPEC President Sheik Ahmed Fahd Al Ahmed Al Sabah of Kuwait said Sunday that although prices were high, the market was well supplied.
Crude inventories were expected to show an increase when the U.S. Energy Information Administration releases its weekly stock data later Wednesday.
Associated Press Writer Wee Sui Lee in Singapore contributed to this report.
Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Copyright © 2005 ABC News Internet Ventures
|
|
