|
Markets dont believe opec affects production Original Source Link: (May no longer be active)
http://www.forbes.com/entrepreneurs/feeds/ap/2006/10/23/ap3112996.htmlhttp://www.forbes.com/entrepreneurs/feeds/ap/2006/10/23/ap3112996.html
Associated Press
Oil Prices Slide Below $59 a Barrel
By MAZIN ELFEHAID , 10.23.2006, 03:37 PM
World oil prices fell Monday amid market doubts about a pledge by the Organization of Petroleum Exporting Countries to curtail production, with many analysts believing the cartel will have difficulty fully enforcing a cut.
Light sweet crude for December delivery fell 52 cents to settle at $58.81 a barrel on the New York Mercantile Exchange. In London, Brent crude futures on the ICE Futures exchange dropped 76 cents to settle at $58.92.
Though OPEC's Friday decision to cut output by 1.2 million barrels a day to reverse a three-month price slide initially triggered a rise in prices, market analysts were mindful that oil prices are still twice as high as they were three years ago and that oil producing nations still have plenty of incentive to pump away.
"This last OPEC cut was misbegotten," market watcher Societe Generale said Monday in a report.
Oil prices have fallen by roughly $20 since a mid-July peak above $78 a barrel due to rising supplies, weakening demand growth and a milder-than-anticipated hurricane season.
Vienna-based analyst group PVM Oil Associates also said the Iraqi oil minister, Hussein Al-Shahristani, caused a stir this weekend by announcing that his country's oil production reached 2.86 million barrels a day this month, effectively passing prewar levels.
"However, these statements should be handled with care as they might rather be seen as an attempt to distract from the current political situation," PVM said, adding that according to its own data, Iraq's oil production this month would amount to 2 million barrels a day.
Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures, said "there's a lot of crude oil available in the market. Refiners would like to take less crude oil ... also, they're reducing refining operations."
He said that without fresh momentum, prices could fall further toward the mid-$50 range in coming months.
OPEC has a history of producing above its official quota when prices are high and analysts are therefore reluctant to accept the cartel's intentions at face value.
Moreover, many analysts see OPEC's action as proof that the group responsible for supplying more than a third of the world's oil is increasingly worried about slowing demand growth and burgeoning supplies from non-OPEC sources.
Oil prices have tumbled in recent months due to rising global supplies, a weaker-than-anticipated hurricane season and expectations for slower economic growth.
Nymex heating oil futures fell 1.1 cent to $1.669 a gallon, while gasoline futures slid less than a cent to settle at $1.4715 a gallon. Natural gas futures declined by 36 cents to settle at $6.881 per 1,000 cubic feet.
Copyright 2006 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
|
|
