The price of oil climbed sharply here on Monday on a market rattled by the prospect of a cold northern hemisphere winter, but little market-moving news emerged from the International Energy Forum in Riyadh over the weekend.
Benchmark Brent North Sea crude oil for delivery in January was selling for $33.65 a barrel here, up from $33.08 a barrel at the close Friday.
Prices had risen to $33.95 in initial deals. The main factor behind the increase in prices was a drop in temperatures in the United States over the weekend, while fears of a slowdown in Iraqi oil exports in protest over a dispute with the United Nations over oil revenues had added to market concern, analysts said.
The three-day meeting of consuming and producing nations hosted by Saudi Arabia ending on Sunday did not reach an official consensus on a specific 'fair' price for crude, but Saudi Oil Minister Ali al-Nuaimi stressed that the demands of the two sides were not far apart.
"We are hearing calls from the consumers for a price band between $20-25 (a barrel).
"We say that $22-28 is acceptable for us, so the difference between our two positions is not great," he said.
Al-Nuaimi also sought to reassure consuming countries that Saudi Arabia would plug any supply gaps caused by "disaster or political actions."
"We can easily put about 1.8 million (barrels per day) within 90 days," he said, responding to fears of a halt to Iraqi exports.
Further comments from the Saudi's top oil man, which indicated that a majority of the member states of the Organisation of Petroleum Exporting Countries had not ruled out further production increases before their next meeting on January 17, also appeared to fall on deaf ears in the market.
"The majority have not ruled out that an increment could take place before the next meeting," in Vienna, Ali al-Nuaimi told the Middle East Economic Survey (MEES) published in Nicosia on Monday.
"But it would have to be justified," he said. "But I do want to repeat that there has not been a conscious decision that nothing is going to be done even if prices get out of hand or go haywire for any duration of time."
The market has been concerned that OPEC was looking to tighten the taps to avoid a glut of crude on the oil market when temperatures fall in the spring.
In the meantime, however, the prospect of a cold winter has caused traders to stock up with crude, pushing prices back up towards 34 dollars a barrel.
"The impact of cold weather in the United States ... has helped to push oil sharply higher" on Monday, the GNI brokerage said in a research note.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)