BLBG: Oil Little Changed as OPEC Signals Group Will Maintain Output
By Alexander Kwiatkowski
Dec. 21 (Bloomberg) -- Crude oil traded little changed before an OPEC meeting tomorrow in Angola where ministers are expected to maintain production quotas.
The Organization of Petroleum Exporting Countries is comfortable with current prices and will maintain output levels, Angolan Minister and the group’s President Jose Maria Botelho de Vasconcelos told state radio today. Oil is near $75, the level targeted by Saudi Arabia, the group’s largest producer.
“After this meeting, it might become clear that OPEC can do nothing at the moment to influence prices,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. “They should cut production, but they don’t want to give the market the idea that it is oversupplied.”
Crude oil for February delivery, the most actively traded contract, was at $74.62 a barrel, up 20 cents, in electronic trading on the New York Mercantile Exchange at 9:55 a.m. London time. The contract earlier rose as much as 45 cents, or 0.6 percent, to $74.87.
The January contract, which expires today, traded 10 cents lower at $73.26 a barrel.
The Organization of Petroleum Exporting Countries, supplying about 40 percent of the world’s oil, is meeting amid expectations that crude demand will rebound in 2010 after a two- year slump as the global economy mends. Officials from Algeria, Kuwait, Libya and Qatar have said they want the group to maintain current quotas. Iran and Nigeria have also signaled they do not expect any change at this meeting.
‘Comfortable Price’
“At the moment we are comfortable with prices,” de Vasconcelos said in an interview with Radio Nacionale de Angola. “Everything indicates that we will maintain the present situation,” when OPEC ministers meet tomorrow.
Brent crude oil for February settlement rose as much as 57 cents, or 0.8 percent, to $74.32 a barrel on the London-based ICE Futures Europe exchange. The contract was at $74.14 a barrel at 9:57 a.m. London time.
“We expect prices could ease somewhat after the OPEC announcement as participants will be reminded that OPEC will not be doing anything to tighten supplies anytime soon,” Edward Meir, senior analyst with MF Global Ltd. in Connecticut, said in a report today.
Crude futures climbed 5 percent last week, the most in two months, and have gained 64 percent this year.
Prices jumped after Iranian troops occupied an oil field in a disputed border region with Iraq. Iranian troops withdrew from the well in the East Maysan field after an armed confrontation at the deposit, Iraqi government officials said today.
To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net
