Oil hovers below $83 ahead of OPEC policy meeting

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Associated Press

Posted on June 13, 2012 at 9:01 AM

Updated Thursday, Jun 14 at 4:02 AM

SINGAPORE (AP) — Oil hovered below $83 a barrel Thursday in Asia as some OPEC members push for the group to cut crude production amid falling prices.

Benchmark oil for July delivery was up 15 cents to $82.77 per barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 60 cents to settle at $82.62 in New York on Wednesday.

In London, Brent crude for July delivery was up 23 cents at $96.95 per barrel on the ICE Futures exchange.

The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global crude output, is scheduled to begin its two-day quarterly meeting later Thursday with the 12-nation cartel split on whether to cut production quotas.

After a 22 percent drop in crude prices from early last month, some OPEC members such as Iran and Venezuela will likely support an output reduction to help push prices higher. However, Saudi Arabia, the group's biggest producer, is expected to call for quotas to remain unchanged.

Analysts say they don't expect OPEC to cut supplies unless global economic growth shows signs of a sharper slowdown.

"If things remains as now and the global economy muddles through, the case for a sharp immediate change in oil output policy looks questionable," Barclays said in a report. "However, should those fundamentals worsen sharply the margin of disagreement within OPEC is likely to narrow significantly."

Crude has hovered in the low $80s for about the last two weeks after plunging from $110 in February. Barclays estimates that if prices were to stay where they are, the U.S. and Europe would each save $100 billion on their annual crude import bills.

In other energy trading, heating oil was up 0.9 cent at $2.62 per gallon while gasoline futures rose 0.3 cent at $2.66 per gallon. Natural gas slid 0.1 cent at $2.18 per 1,000 cubic feet.

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Follow Alex Kennedy on Twitter at http://twitter.com/alexkennedy_ap

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