KUWAIT CITY: The Organization of Petroleum Exporting Countries should maintain output at its meeting next month because oil prices are satisfactory, the Kuwaiti oil minister said on Wednesday.
Asked if OPEC needs to increase or cut output, Sheikh Ahmad Abdullah Al-Sabah said the organization “should maintain output,” adding that he hoped prices would remain between $70 and $80 a barrel. “Current oil prices are not bad at all,” he told reporters, adding that he was optimistic that demand will pick up in the near future.
OPEC is due to meet in Vienna on Sept. 9.
Oil prices jumped above $70 a barrel Wednesday after the US government reported a huge draw of crude oil from US stockpiles.
Benchmark crude for September delivery added $1.78 to $70.97 a barrel on the New York Mercantile Exchange. The contract ends Thursday.
Prices jumped immediately after the Energy Information Administration (EIA) said crude in storage fell by 8.4 million barrels last week. Gasoline held in storage fell as well, but the drawdown in crude was the big surprise.
Investors have been looking for signs that the US would recover its energy appetite as the economy recovered. The EIA’s report that crude inventories dropped by 8.4 million barrels last week showed that this may be happening.
Oil prices sank earlier in the day, after stock markets in Asia and Europe slumped on worries about consumer spending.
Shanghai’s index tumbled as much as 5 percent, pulling down other markets in Britain, Germany and France.
In the US, retailer BJ’s Wholesale Club and farm equipment maker Deere & Co. both reported a drop in quarterly profit. Both beat Wall Street expectations, but they added to a growing feeling that consumers have become much more conservative with their money.
Meanwhile, Hurricane Bill grew to a Category 4 storm, but forecasters said it would steer clear of petroleum refiners in the Gulf Coast. US benchmark crude supplies have a huge impact on energy prices around the world. The price of crude dropped earlier this year as US supplies grew to their highest level in nearly two decades.
Oil surged back near $70 a barrel in Asian trade on Wednesday on better retail sales in the United States and bargain-buying following recent falls.
Oil prices hit record peaks above $147 in July last year, but tumbled to $32 in December due to weak energy demand in the wake of the global financial crisis before bouncing back to current levels.
In other Nymex trading, gasoline for September delivery climbed 2.18 cents to $2.022 a gallon and heating oil added 2.58 cents to $1.8908. Natural gas for September delivery increased 4.8 cents to $3.144 per 1,000 cubic feet. In London, Brent prices fell 12 cents to $72.25 a barrel on the ICE Futures exchange.