LONDON, 18 January 2005 — Oil prices rose in trading here yesterday, supported by widespread disruptions to supplies amid cold weather in the United States and a possible output cut by OPEC later this month, analysts said.
The price of Brent North Sea crude oil for March climbed 24 cents to $45.20 a barrel in late deals. The February contract ended at $45.15 last Friday, the highest level since Dec. 1. Trading in New York was shut yesterday because of a public holiday.
New York’s main oil contract, light sweet crude for delivery in February, closed at $48.38 a barrel on Friday, the highest level since Nov. 30. “Prices are underpinned by cold weather in the US, as well as jitters that OPEC might cut production at the next OPEC meeting,” Fimat broker Julian Keits said. Analysts for the Sucden brokerage firm said the frosty weather “coincided with a series of supply outages around the globe”.
They added: “Output in the US Gulf of Mexico and the North Sea are still disrupted (by bad weather) while Iraqi exports have been reduced by sabotage.”
Traders were meanwhile digesting comments from acting OPEC Secretary General Adnan Shihab-Eldin, who said the world oil market was adequately supplied with crude.
Shihab-Eldin’s remarks last Friday were seen as justifying the possible announcement of a production cut when the Organization of Petroleum Exporting Countries meets in Vienna on Jan. 30 to discuss output.
The 11-member OPEC group agreed in Cairo last month to reduce production by one million barrels a day from the start of 2005 to bring the group closer to its official output ceiling of 27 million barrels. OPEC ministers said then that they were ready to reduce output again if needed to mop up excess supply in anticipation of a seasonal downturn in demand as the northern hemisphere winter ends.
