Oil Price Slips on Prospects of Supply Increase

Published May 30th, 2000 - 02:00 GMT

Oil prices slipped back Tuesday following hints of an increase in world output. 

By mid-afternoon, the price of benchmark Brent for July delivery was 28.85 dollars a barrel, 37 cents lower. 

In New York on Friday, light sweet crude for July delivery closed at 30 dollars a barrel, after reaching a peak of 30.82 dollars earlier in the session. 

Dealers linked the price fall to remarks by Venezuelan oil minister Ali Rodriguez, who is also president of OPEC, although GNI Research said his comments were nothing new. 

The brokerage said Rodriguez had effectively reiterated what has been known for two months, namely that output would automatically be increased if average prices rose above 28 dollars a barrel over 20 consecutive working days. 

The March Organization of Petroleum Exporting Countries (OPEC) meeting also agreed output would be reduced if prices fell below an average of 22 dollars a barrel. 

GNI Research added that Rodriguez had refused to comment on whether the OPEC meeting on June 21 would agree to an output increase in addition to any automatic adjustment. 

"It would be wrong to place too much emphasis on the latter point, but at least he did not reiterate the view from the last meeting of Venezuela, Mexico and Saudi Arabia that no hike was needed," the brokerage said in its daily note – LONDON (AFP) 

© 2000 Al Bawaba (www.albawaba.com)

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