LONDON, 18 January 2007 — World oil prices dived close to $50 per barrel in London and New York yesterday, hitting fresh 19-month lows after the market ruled out the prospect of a new OPEC production cut, analysts said. New York’s main oil futures contract, light sweet crude for delivery in February, fell in electronic trade to $50.28 — the lowest point since May 25, 2005. In London, the price of Brent North Sea crude for March delivery sank as low as $50.75 per barrel — which was last seen May 31, 2005.
New York crude later rebounded slightly to $51.45 in floor trading, up 24 cents from Tuesday’s close, while London Brent stood at $51.89, up 27 cents.
Oil prices have now sunk by more than 16 percent since the start of 2007, dampened also by low heating fuel demand been caused by recent milder-than-expected winter weather in the United States and Europe. Crude futures tumbled on Tuesday after Saudi Arabia signaled that it would not back an emergency meeting of the OPEC organization, aimed at propping up oil prices.
Minister of Petroleum and Mineral Resources Ali Al-Naimi said on Tuesday there was no need to call an emergency meeting of the Organization of the Petroleum Exporting Countries to discuss a possible output cut.
Al-Naimi, speaking in New Delhi on the sidelines of a gathering of oil ministers from several OPEC nations, described the situation in the crude market as “healthy”.
Saudi Arabia will have spare production capacity of three million barrels per day on Feb. 1, Naimi said yesterday. “Spare capacity on Feb. 1 will be three million (barrels per day),” he told reporters in New Delhi.
