Crude Rebounds after Declines Prompted by Saudi Output Increase
Crude rebounded in London and New York trade Thursday, following sharp declines triggered by promises of more oil from Saudi Arabia, the world's leading oil producer.
In London, benchmark Brent crude for August delivery was trading at 29.78 dollars a barrel, 40 cents higher, confirming a rally late Wednesday.
In New York, light sweet crude for August delivery rose 38 cents to 31.05 dollars a barrel shortly after the market opened on Thursday.
On Wednesday in New York, light sweet crude closed 1.83 dollars lower at 30.67 dollars a barrel.
The first significant losses for weeks were triggered by an announcement Monday from Saudi Oil Minister Ali Nuaimi stating his commitment to lower prices and promising to pump 500,000 extra barrels per day -- together with other OPEC members -- if necessary.
But initial steep price falls have been tempered, as the market awaits confirmation that more crude will be forthcoming, amid cracks in fragile OPEC unity.
Venezuela, whose oil minister holds the rotating OPEC presidency, reiterated its dissent.
Venezuelan President Hugo Chavez urged Saudi King Fahd and other Organization of Petroleum Exporting Countries (OPEC) member states "not give in to blackmail" from industrialized nations that want increased oil output.
Chavez repeated his position that Venezuela itself "rejects pressure from industrialized countries" to boost oil output and thus lower prices.
"We are not going to do this, as I have already said," he said.
In Lagos, Sam Dinka, a senior official at the Department for Petroleum Resources, said Nigeria would maintain its oil production at its quota of 2.03 million barrels a day, agreed at the OPEC meeting in June.
"If everybody increases production, prices will crash through the floor and we are not willing to allow that to happen," he said.
Nigeria's Presidential Adviser on Petroleum, Rilwanu Lukman, is also secretary-general of OPEC and ensures "strict respect" by Nigeria of OPEC quotas, Dimka said – LONDON (AFP)
© 2000 Al Bawaba (www.albawaba.com)