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23 April 2024

Oil prices up in Asian trade

By Agencies

Oil prices moved higher in Asian trade on Wednesday with Opec expected to stick to its production levels despite pressure from US President George W Bush to pump more crude, dealers said.


In afternoon trade, New York's main contract, light sweet crude for April delivery, rose 24 cents to $99.76 (Dh366.12) a barrel from $99.52 (Dh365.24) in late US trades on Tuesday.


London's Brent North Sea crude for April delivery added 21 cents to $97.73 (Dh358.67).


Bush signaled he would be tracking Opec's decision-making as fears mount that the US economy could be on the cusp of a recession.


"I think it's a mistake to have your biggest customer economy slow down, or your biggest customers' economy slowing down, as a result of high energy prices," the US president said.


"My advice to Opec is understand the consequences of high energy prices," Bush said.


Analysts however believe that Opec, which pumps 40 per cent of the world's oil, will not bow to pressure from the world's biggest energy user when it meets later Wednesday in Vienna.


"Opec is widely expected to leave oil production levels unchanged," said David Moore, a commodity strategist from the Commonwealth Bank of Australia.


"Opec is likely to be keen to avoid any significant oil market surpluses building, especially as we continue to move past the period of high demand associated with the northern winter," he said.


Algerian Oil Minister Chakib Khelil, who is also the president of the Organisation of the Petroleum Exporting Countries (Opec), has said he was not in favor of a production hike.


"I would prefer in this situation to lower production because demand globally is going to be lower," Khelil said ahead of the meeting.


Demand for heating fuel was set to dampen during the second quarter as warmer temperatures hit Europe and the United States.


Opec's official daily output quota is currently set at 29.67 million barrels.


The price of oil has doubled since the start of 2007 – a major reason being soaring demand for energy from emerging economic powers China and India.


Another factor has been unrest in oil-producing countries, notably Iran and Nigeria.


New York oil prices struck a record high of $103.95 (Dh381.50) Monday on the back of the weak dollar. Adjusted for inflation, that beat record levels reached after the 1979 Iranian revolution. (AFP)