Oil prices bounce back on bargain hunting
The price of oil bounced back above $30 a barrel here on Monday, as market players waded back into the fray following a sharp sell-off late last week, dealers and analysts said.
A barrel of North Sea Brent crude for November delivery rose to $30.57 from $29.84 on Friday evening, as fears persisted that supply volumes will not be sufficient to meet demand.
Analysts said the latest spike in prices, which hit 10-year high points last month, was a reaction to a severe sell-off last week which was itself prompted by reassurance on output volumes by the Organisation of Petroleum Exporting Countries (OPEC).
"The market has come off quickly (on Friday) so now it's time for bargain hunting," said Lawrence Eagles, an analyst with the GNI brokerage. "I think the market is going to go down again over the next weeks."
Oil prices have eased off high points of nearly $35 a barrel in London -- and above $37 in New York -- amid hopes that producer nations will provide enough crude this winter to replenish stocks which have contracted sharply in recent months.
The United States has already ordered the release of part of its strategic reserve to boost stock volumes.
OPEC, which had promised to boost output by 800,000 barrels a day as of Sunday, meanwhile committed itself last week to working for "fair and stable" prices.
But Kuwait's Oil Minister Sheikh Saud Nasser al-Sabah said Sunday that this did not necessarily mean lower prices.
"I believe the current price of oil is stable and good. We will exert every possible effort to maintain the existing level," Sheikh Saud said. "The price of oil is satisfactory and acceptable to all sides."
The conflicting noises from OPEC officials has left the market extremely volatile.
"The market is still nervous," said Prudential Bache analyst Tony Machacek. "Whether there will be a long term recovery or not remains to be seen. If there is cold weather in winter, we may see higher prices." – (AFP)
© Agence France
© 2000 Mena Report (www.menareport.com)