JAKARTA, 7 September 2004 — Crude oil prices are expected to fall over the coming two months as supply uncertainties fade and markets settle on the expectation of a smooth US presidential election, OPEC’s president said yesterday.
“Future trading for September-October indicates a trend toward a drop in prices and this is good news,” Purnomo Yusgiantoro, who is also Indonesia’s energy minister told reporters.
He said prices would begin to slide ahead of the US presidential vote in November, which is expected to proceed without a hitch, and the resolution of problems with Russian oil giant Yukos.
Oil prices have fallen from record levels of almost $50 per barrel in New York in August, when the market spiked over supply fears partly centered on Russia’s Yukos.
Yukos is locked in a legal battle with the Russian authorities while its founder Mikhail Khodorkovsky is on trial for tax evasion and fraud. The firm recently cut its output forecast for 2004.
OPEC members are scheduled to meet on Sept.14 in Vienna, where they will consider raising the cartel’s price band to between $28 and $30 a barrel, Qatar’s energy minister, Abdullah ibn Hamad Al-Attiyah, was quoted as saying Saturday.
OPEC’s current price range is between $22 and $28 a barrel, above or below which it can adjust production.
The organization agreed at a previous meeting in June to raise its output ceiling by 2.5 million barrels a day in two stages in an effort to curb high world prices.
A rise of two million barrels per day (bpd) went into effect in July and another of 500,000 bpd on Aug. 1.
Oil prices fell in London yesterday despite new sabotage attacks on Iraqi pipelines and worries about tropical storm Frances, with the New York market closed for the Labor Day holiday.
The price of benchmark Brent North Sea crude oil for delivery in October lost 43 cents to $40.80 per barrel in late deals.
New York’s reference contract, light sweet crude for October delivery, dipped seven cents to $43.99 per barrel on Friday, before the market closed for a three-day break.
Meanwhile, Hurricane Frances, which was downgraded to a tropical storm Sunday, moved off Florida’s west coast yesterday but experts said it could build up strength again over the warm waters of the Gulf of Mexico.
“Hurricane Frances did move into the Gulf of Mexico early this morning, so we are keeping an eye to see if anything happens to the refineries out there,” Elliot said. And yet another hurricane loomed in the distance.
Hurricane Ivan, a dangerous Category 4 storm packing maximum sustained winds of nearly 215 kilometers (135 miles) per hour, was a 1,010 kilometers (625 miles) east-southeast of Barbados early yesterday.