Oil prices rose above $33 a barrel here Tuesday as investors considered a possible production cut by OPEC which appears increasingly concerned that prices will collapse in the spring.
Benchmark Brent quality crude oil for December delivery was being quoted at $33.29 a barrel from $32.94 at the close on Monday.
The Organization of Petroleum Exporting Countries (OPEC) concluded its ministerial meeting in Vienna on Monday with a refusal to give in to demands for a further output increase to bring down prices.
"The feeling that we have now is that the market is getting perhaps a little saturated," OPEC secretary general Rilwanu Lukman said.
"The stock build-up is likely to hit us in the face later in the New Year if we don't watch it," he added.
The market was now concerned that OPEC kingpin Saudi Arabia might trim excess production in the near future to avoid a glut on the oil market when demand weakens in the spring
"Saudi (Arabia) believes that there are signs that the oil market is oversupplied at the moment and by continuing to exceed its quota it will contribute to a large build up in stocks this winter," the GNI Institute said.
"Therefore by testing the water with a small cut ... it will be able to gauge the true level of demand in the market," it added.
Saudi Arabia might also tighten the taps to strengthen its bargaining position when OPEC meets again in January, when other members of the organization are likely to request that the Saudis make a greater contribution to output cuts given that they are contributed more now, GNI said.
With refineries still running at full steam in the United States and heating oil still in short supply, forecasts of a cold snap in the United States and much of Europe over the coming days have put further upward pressure on prices, analysts said.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)