Crude oil prices closed firmer on trading on the New York Mercantile Exchange Monday as the Organization of Petroleum Exporting Countries this weekend declined to raise quotas for a fifth time this year.
In London, Brent futures remained near a 1-month high on the International Petroleum Exchange today, as the market waited for the latest United States oil stocks' data to be released after the close of trading in New York. And news of cooler weather for both the US and Europe rekindled heating oil and crude demand, helping keep prices high in New York and London.
Brokers said prices had been boosted by an interview given by Saudi Arabian Minister of Petroleum and Mineral Resources Ali I. Naimi, in which he was quoted as saying that the economies of the developed world could, in his opinion, withstand oil prices in excess of $30/bbl.
Traders said OPEC's most recent agreements, which left output at a 21-year high, are only now beginning to appear in inventories.
Anticipation that the American Petroleum Institute's weekly oil stocks report would report a build in stocks of 1.5 million-2 million bbl of crude also kept support under prices. If this proved to be the case, futures could easily lose as much as $1/bbl in value, sources said.
The API report is due for release after trading in London and New York Tuesday. Last week's API report showed stocks of crude oil remained virtually unchanged, even after OPEC boosted output quotas twice in October and US crude oil imports reached their highest level since July. Heating oil inventories are 31.5% lower than a year ago, the API said.
NYMEX sweet, light crude, the American benchmark, gained 45� to settle at $34.47/bbl for December delivery on Monday, while the January contract stood at $33.56, up by 56�. Refined petroleum products closed higher, with December home heating gaining 0.88� to finish at $1.0163/gal, while unleaded gasoline for the same month improved by 1.55� to finish at 88.52�.
In after-hours electronic access trading in New York, NYMEX crude was fetching $34.68/bbl for the December position and $33.74 for the January contract, both up from the NYMEX close.
Meanwhile, in London Monday, North Sea Brent crude oil futures ended the day sharply higher on the International Petroleum Exchange. Brent for December delivery stood at $32.94/bbl, up by 92� from the previous close. Also on the IPE, the December natural gas contract settled at the equivalent of $4.10/Mcf, up 7�.
Still, most analysts agree crude oil supplies are plentiful worldwide. During the third quarter, world production exceeded demand by 1.8 million b/d, according to the International Energy Agency, which monitors oil markets for 25 industrialized nations.
Most OPEC ministers signaled at their meeting in Vienna that their focus was now more on expected drops in crude oil demand and a possible price decline early next year.
North Sea Brent prices in Singapore showed a firmer tone. Brent for December followed up the New York firmness with a 92� gain to settle at $32.94/bbl. January Brent added 29� to finish at $31.65.
