BLBG: Oil Declines From Two-Year High in London Before Arab Oil Ministers Meet
Crude oil fell from its highest in two years in London as the Arab members of OPEC gathered in Cairo for their annual meeting tomorrow.
The global market for crude oil is “very stable,” Qatar’s Oil Minister Abdullah bin Hamad al-Attiyah said today on arrival in the Egyptian capital. Brent crude climbed to its highest since October 2008 earlier today after a report yesterday showed confidence among U.S. consumers improved. Prices will extend gains next week, according to a Bloomberg News survey.
“Core fundamentals are relatively firm but we’re not running out of oil,” said Olivier Jakob, managing director of Petromatrix in Zug, Switzerland. “There’s no market today.”
Brent crude oil for February settlement rose as much as 49 cents, or 0.5 percent, to $94.74 a barrel on the London-based ICE Futures Europe exchange, the highest since Oct. 2, 2008. It settled at $93.77 a barrel at an earlier-than-normal closing at 1 p.m. London time. Prices have gained 2.3 percent this week, and 20 percent this year.
West Texas Intermediate oil for February delivery advanced $1.03 to $91.51 a barrel yesterday on the New York Mercantile Exchange, the highest settlement since Oct. 3, 2008. Prices are up 15 percent this year. Electronic and floor trading is closed today because of the Christmas holiday.
Futures may rise next week, a Bloomberg News survey of 30 analysts and traders showed. Sixteen respondents, or 53 percent, forecast crude will rise through Dec. 31. Last week, 53 percent said the market would drop.
Snow in Europe
There will be snow in Paris, Munich and northeast England, according to forecasts on the U.K. Met Office’s website.
Oil rose yesterday after confidence among U.S. consumers advanced, spurring optimism that fuel demand will increase. The Thomson Reuters/University of Michigan final index of consumer sentiment for December climbed to 74.5 from 71.6 in November.
“Prices are responding to good winter demand and temperature factors,” said Bill Farren-Price, chief executive officer of Winchester, U.K.-based consultants Petroleum Policy Intelligence. “Demand is picking up.”
Prices will reach $100 a barrel, Shokri Ghanem, chairman of Libya’s National Oil Corp. told reporters in Cairo, without specifying a timeframe. Libya’s top oil official is in the Egyptian capital to attend a Dec. 25 meeting of OPEC’s seven Arab-nation members. The Organization of Petroleum Exporting Countries’ current compliance rate with production quotas is 60 percent and needs to improve, he said.
OPEC, which accounts for 40 percent of global oil supply, decided at its last meeting in Quito, Ecuador, on Dec. 11 to maintain its target of 24.845 million barrels a day, set in 2008. OPEC’s next meeting is scheduled for June 2011.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
