Crude higher in Asia ahead of OPEC, US data

Crude higher in Asia ahead of OPEC, US data

Singapore (Platts)--15Jun2005


World oil prices drifted higher on Access during Asian trading hours as the
market positioned ahead of OPEC's meeting in Vienna later Wednesday and US
inventory data also due out later in the day. Light, sweet West Texas
Intermediate Crude futures were last traded up 33cts at $55.33/bbl at 0627
GMT, having dipped below $55/bbl only briefly. The contract settled 82cts
lower at $55/bbl on the New York Mercantile Exchange on Tuesday. 

Markets were poised for OPEC to announce a 500,000 b/d increase to 28-mil b/d
in the group's formal production ceiling and leave open the possibility of
another 500,000 b/d increase at President Sheikh Ahmed Fahed al-Sabah's
discretion if oil prices remained high. The proposal, which Sheikh Ahmed said
came from Nigeria, late Tuesday won the backing of OPEC's Ministerial
Monitoring Committee which is set to recommend it to the full conference later
Wednesday. Ali Naimi, the oil minister of OPEC kingpin Saudi Arabia, has lent
his support to the move.

"There is nothing wrong with 28.5-mil b/d," Naimi said of the figure that
would be OPEC's output ceiling if the current ceiling is sincreased by 1-mil
b/d. Sheikh Ahmed said late Tuesday that the trigger for kicking off
consultations on the second increase could be the OPEC crude basket staying
above $50/bbl for 7-10 days. The basket stood at $50.83/bbl Monday. The
president also suggested that a "good number" of cartel members would support
a two-pronged ceiling hike. However, Venezuelan oil minister Rafael Ramirez
and Libya's Fathi Ben Shatwan have voiced their opposition to the two-stage
hike. Shatwan said he believed OPEC should "see the effect" of the first
increase on the market before talking about a second one. Meanwhile, heating
oil futures were stronger in Asia despite expectations for a build in US
inventories. Benchmark July heating oil futures were last traded at
$1.6450/gal at 0636 GMT, up 64 points from their $1.6386 Tuesday settle.

Analysts were projecting distillate inventories to build by 1.7-mil bbl in
reports from the US Department of Energy and the American Petroleum Institute
due out later Wednesday. US commercial crude stocks were expected to show a
draw of 1.3-mil bbl, while gasoline inventories were expected to climb 900,000
bbl. Earlier in the day Japan reported that its crude stocks had risen 5.8%
for the week ended Jun 11, to 130.46-mil bbl. Japan's gasoline stocks fell
7.6% to 13.36-mil bbl, while distillates stocks rose 1.3% to 34.22-mil bbl.

This story was originally published in Platts Global Alert
http://www.globalalert.platts.com

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