Monday, Aug 18, 2008
LONDON: The Organization of Petroleum Exporting Countries may decide to cut the cartel’s oil output quota as the price of crude risks falling under 100 dollars a barrel, energy consultancy CGES said Monday.
“The worsening economic outlook suggests that oil prices have further to fall, but OPEC, whose members are due to meet in early September, may act to prevent them from falling too far,” the Centre for Global Energy Studies said in its latest monthly report.
“There is a danger, though, that the Organization will over-react, cut its production too sharply and send oil prices back up,” added the London-based consultancy.
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World oil prices rose on Monday as traders fretted about the potential impact of Tropical Storm Fay on energy facilities in the Gulf of Mexico. New York’s main contract, light sweet crude for September delivery, added 35 cents to 114.12 dollars a barrel after bouncing above 115 in electronic deals.
London’s Brent North Sea crude for October advanced by 43 cents to 112.98 dollars. Oil futures had fallen sharply last week on the prospect of reduced demand for energy around the globe owing to slower economic growth.
“The CGES believes that OPEC member-countries, facing increased government spending and rising inflation, will not be happy to see prices fall far below 100 dollars per barrel,” added Monday’s report.
Oil prices have sunk since hitting record highs above 147 dollars one month ago. However, crude futures are more than 10 per cent higher than at the start of the year when they surged past 100 dollars for the first time in history.
This article was posted: Monday, August 18, 2008 at 2:32 pm