LONDON, 5 June 2004 — Oil prices fell further yesterday from recent record high levels as supply fears eased somewhat after OPEC’s pledge to raise its output ceiling by more than 10 percent.
The price of benchmark Brent North Sea crude oil for July delivery lost 63 cents per barrel to $35.77 in late trading in London.
New York’s reference light sweet crude July contract also dropped 63 cents to $38.65 per barrel in early deals.
Prices have cooled since the US price hit a record high level of $42.45 a barrel in electronic trading on June 1.
Meanwhile, OPEC producers said yesterday they were pleased to see oil drop below $40 a barrel and predicted prices could ease further on rising export flows.
The Organization of Petroleum Exporting Countries agreed on Thursday a two-stage increase of 2.5 million barrels a day in July and August, raising formal supply quotas by 11 percent.
“We hope to reach a reasonable and acceptable price and believe that $28 is reasonable for everybody,” said Qatar Oil Minister Abdullah Al-Attiyah. He was referring to an OPEC index price now valued just under $36 a barrel. “This is the first time OPEC wants to see the price in a donwtrend,” said Iranian Oil Minister Bijan Zanganeh.
The increase in quotas reflected concerns among some OPEC members about triggering a price crash and many in the group appear keen to keep prices above $30 a barrel.
“We hope with this decision to be close to $35 for the OPEC basket,” Zanganeh said.