Oil prices hover below 30 dollars a barrel in London
Oil prices languished below 30 dollars a barrel here on Friday after the rganisation of Petroleum Exporting Countries (OPEC) ended its summit in Caracas on Thursday with a pledge to provide "fair and stable prices."
The benchmark Brent North Sea crude oil for November delivery was selling at 29.75 dollars a barrel, against 29.60 dollars at the opening of regular trading and 28.26 dollars at the close on Thursday.
Winding up a two-day summit in celebration of its 40th anniversary in Caracas, OPEC pledged on Thursday to "continue providing adequate, timely and secure supplies of oil to consumers at fair and stable prices."
However, it also criticised consumer nations for their high taxation on petrol, which it said "forms the largest component of the final price to the consumers in the major consuming countries."
OPEC called upon consuming nations to "reconsider their policies with the aim of alleviating this tax burden for the benefit of the consumers."
As expected, OPEC announced no changes in its oil policy, but adopted a generally conciliatory tone in its Caracas Declaration.
"We want to be friends and partners," OPEC Secretary-General Rilwanu Lukman said, stressing that the oil-producing cartel wanted a dialogue with consumer nations instead of "the confrontations of the past."
Of greater significance was the continued effect of the Saudi promise on Wednesday to pump as much oil as necessary to calm the market.
Speaking in Caracas, Saudi Crown Prince Abdullah Bin Abdel Aziz had said: "The Kingdom of Saudi Arabia is willing and ready to offer whatever quantity is needed to stabilize the market."
Prudential Bache analyst Paul Keenan said he believed both the Saudi comments and the Caracas Declaration had had an impact on the market.
"Yesterday there was a little bit of bearishness coming out and it bounced back today on the back of the headlines suggesting that it's a Western issue to resolve their tax situation, and that the situation would be addressed accordingly from that end once that had been rectified," he said.
Keenan added that technical bearishness had also played an important part in pushing oil prices below 30 dollars a barrel.
"It's very important, a lot of people look at it often infinitely more than the actual news," he said.
"One of the most important things is the long term moving average ... which gives you an indication of where the market is going -- if the price trades below that, it is bearish." "That's why we traded through 30 dollars on the Brent."
Concern that Iraq might stop pumping oil in protest of a territorial dispute with southern neighbour Kuwait also eased after Iraq dismissed such talk.
Iraqi Vice President Taha Yassin Ramadan said on Thursday in Caracas: "We will not stop supplying oil."
Ramadan also gave reassurance that his country did not pose a threat to Kuwait.
"There is no threat from Iraq to Kuwait and Saudi Arabia," he said. Analysts said that they expected oil prices in London to remain around current levels over the coming days.
Keenan forecast "sideways trading around these key levels with a slight upwards bias." - (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)