TEHRAN, 9 March 2005 — OPEC would prefer to see the price of its reference crude basket stabilize at between $35 to $40 per barrel and will maintain its existing output in the short-term, Iran’s oil minister said yesterday.
“The most that OPEC is able to do is ruling over the production for the short term. We prefer long-term stable prices, sustainable prices without fluctuation,” Bijan Namdar Zanganeh told reporters. “We now have high prices in the market, and any decrease in oil production would send the wrong signal to the market,” he added. “We are not looking for high prices but the market is not in our hands.”
He said for OPEC’s reference crude basket, “the price of $35 to $40 per barrel, without fluctuation, is acceptable.”
The organization’s reference basket price of oil stood at $48.37 on Friday. His comments were a further signal that ministers from the 11-nation organization are all but certain to leave production unchanged when they meet on March 16 in the Iranian city of Isfahan.
Meanwhile, world oil prices fell yesterday amid warmer temperatures in the northern hemisphere and further reassuring comments from OPEC, dealers said.
New York’s main contract, light sweet crude for delivery in April, dropped 40 cents to $53.49 a barrel in electronic dealing.
In London, the price of Brent North Sea crude oil for delivery in April dropped 66 cents to $51.43 a barrel.
Crude futures reached a new four-month high in New York on Monday, closing up at $53.89 on Monday - its strongest finish since Oct. 26 - due to speculative buying and concerns about surging global demand. Weather forecasts pointed to warmer temperatures in the northeast of the United States — a crucial market for heating fuel — and would ease supply worries, analysts said.
“Warmer weather eased concerns about tight oil product supplies,” according to analysts at the Sucden brokerage firm.
The cold snap on either side of the Atlantic was a main factor behind rising oil prices at the start of March. The price of Brent North Sea crude oil rocketed to a new record high of $53 per barrel on March 3 and crude futures approached record levels in New York above 55 dollars.
Meanwhile, traders were gearing up for the latest weekly snapshot of US inventory data, due to be published today. If weather forecasts proved correct, it could be the last set of figures to show a drop in heating fuel, as the northern hemisphere winter draws to a close.