Oil prices steady as market awaits confirmation of more oil
LONDON, July 24 (AFP) - Oil prices held steady around their lowest levels for two months Monday as the market continued to await confirmation from the world's leading oil producer Saudi Arabia that it plans to pump more crude.
In London, a barrel of benchmark Brent for September delivery crept eight cents higher to 27.60 dollars a barrel.
On Friday in New York, light sweet crude for September delivery closed 1.21 dollars lower at 28.56 dollars a barrel.
In its daily note, GNI Research commented that Monday's trading was dominated by the fact the market still had no confirmation from Saudi Arabia.
Early this month, the leading producer promised an extra 500,000 barrels of oil per day, in concert with other Organisation of Petroleum Exporting Countries (OPEC) producers, if necessary to stabilise prices.
Meanwhile, GNI Research said the "main driving force" behind falls in prices at the end of last week was the drop in petroleum (gasoline) prices, as many refinery problems have been solved.
On Friday, prices in London fell back to less than 28 dollars a barrel for the first time since May 24.
In Vienna, OEPC announced that its basket of crudes had fallen below the 27-dollar level, meaning theoretically that any output increase could be delayed.
At the beginning of last week, OPEC had issued a statement promising an extra 500,000 barrels per day provided prices remained high.
That announcement appeared to have resolved discord within the secretive producers' club, some of whose members had objected to Saudi Arabia's earlier promise to pump more oil on the grounds it was "unilateral."
By contrast with Saudi Arabia's pledge, analysts expected the increase announced by OPEC last Monday to be triggered by a mechanism, established earlier this year, providing for an automatic output rise of 500,000 barrels per day if the price of a basket of OPEC crudes remained above 28 dollars for 20 working days.
Meanwhile, there was also a promise of extra oil from other sources, as major discoveries were announced.
The Offshore Kazakhstan International Operating Company (OKIOC) on Monday said it had made the first oil discovery on the Kazakhstan shelf in the northeast Caspian Sea.
In addition, Anglo-Dutch oil giant Royal Dutch/Shell said it had made an oil discovery estimated at up to 100 million barrels in southern Nigeria.
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)