Crude prices extend gain on supply fears, OPEC
Dubai (Platts)--25Apr2005
Global crude prices extended gains Monday on gasoline supply concerns and on fears that OPEC may not increase production in the near future. Light, sweet US West Texas Intermediate crude for June delivery traded at $55.67/bbl at 1155 GMT, up 28 cts from Friday's settlement at $55.39/bbl on the New York Mercantile Exchange. North Sea Brent crude for June traded at $55.36/bbl Monday, up 39 cts from Friday's International Petroleum Exchange settlement at $54.97/bbl. WTI and Brent have spiked on gasoline supply concerns spurred by US Department of Energy data reporting a 1.5-mil bbl draw in stocks as refiners produced more distillates at the expense of gasoline and as the US heads into the peak demand summer driving season. US refinery glitches have also lent upward support to global crude prices, traders said. ConocoPhillips has failed to restart a 48,000 b/d fluid catalytic cracker at its Lake Charles, Louisiana, refinery. Crude prices also rallied on comments by Saudi Arabia's oil minister Ali Naimi in the Saudi-owned daily al-Hayat newspaper. In the interview Friday, Naimi said his country would raise output in the third quarter of this year to help stocks build in preparation for expected higher demand in the last quarter of the year. Saudi Arabia is currently pumping 9.5-mil b/d of crude, enough to meet oil demand in the US and elsewhere, Naimi said. His comments contrasted with remarks from OPEC President Sheikh Ahmed Fahed al-Sabah earlier in the week that OPEC would unofficially increase output in May, but would defer further any increase in its formal production quotas until a June meeting. Nigeria's top oil official Edmund Daukoru also said Friday he saw no need for OPEC to boost actual output before the June meeting while crude prices are at a "comfortable $50/bbl." Naimi has also said Saudi Arabia is not responsible for the latest price rise. The market has also turned its focus on US President George W Bush's meeting with Saudi Crown Prince Abdullah and Naimi later Monday. The talks are expected to focus on the stalled Middle East peace process and crude prices, AFP reported. A sensitive topic will be soaring oil prices in the US, which experts blame in part for the sharp drop in Bush's approval ratings--to his lowest level in some polls since taking office in January 2001, AFP said. Bush has said he does not have a "magic wand" to lower prices at the pump, but he has seemed to question Saudi statements over the kingdom's level of spare capacity. "I don't think they're pumping flat out," the president told CNBC television this week. "I think they're near capacity, and so we've just got, got to get a straight answer from the government as to what they think their excess capacity is." This story was originally published in Platts Global Alert http://www.globalalert.platts.com
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