Oil above $63 after unofficial OPEC cut
According to Yahoo!News :
LONDON (Reuters) - Oil rose above $63 on Thursday after a report that key OPEC producers, including Saudi Arabia, had agreed unofficially to cut production to stem falling prices.
U.S. crude rose 65 cents to $63.61 a barrel at 1624 GMT, adding to gains of almost $2 the previous session. London Brent was up 93 cents at $63.14 a barrel.
A Nigerian oil industry source told Reuters that Nigeria was joining Saudi Arabia, the world's biggest oil exporter, and Kuwait to trim oil supply from October 1.
"Nigeria will cut by five percent from October 1 because of the unofficial discussions between OPEC members," the source said, asking not to be named.
Oil prices have fallen about 20 percent from a peak of $78.40 in July, prompting uneasiness among some OPEC members.
Edmund Daukoru, OPEC's president, had told Reuters on Tuesday: "something needs to be done to steady the price."
But Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah said on Wednesday that with U.S. crude above $61, most OPEC ministers were content with prices and not inclined now to cut output.
And after the report from Nigeria on Thursday, a Gulf oil source said Kuwait's production was steady and there had been no orders so far to cut.
Last week, Ali al-Naimi, oil minister for Saudi Arabia -- the world's top oil exporter -- also described a U.S. crude price of around $62 as reasonable.
OPEC speculation helped boost prices by almost $2 on Wednesday, even after a weekly report showed a big jump in U.S. fuel supplies.
"The market is astonishingly strong," said Christopher Bellew, a broker at Bache Financial. "Really it seems to be buying by funds, either short-covering or adding to their length because they'd got rid of a lot of their length."
Oil has fallen from its July peak because of rising U.S. fuel stocks, easing economic growth and diminishing tension over Iran's nuclear stand-off, the steepest drop since the 1991 Gulf War.
"We had such a continuous drop in prices, so at some stage it was obvious we would see some rebound," said Frederic Lasserre, head of commodity research at Societe Generale. "It's just purely technical."
Swelling fuel inventories in the United States and talks between the European Union and Iran to resolve the dispute over Tehran's nuclear work suggest the rally may be short-lived, analysts said.
European Union foreign policy chief Javier Solana said on Thursday he had failed to reach a deal with Iran's chief nuclear negotiator on Tehran's atomic ambitions, but they had paved the way for further talks.
Iran is the world's fourth largest oil exporter, and an agreement to end the standoff could lead to more weakness for oil prices, analysts said.
- Let's see how much oil will be cut by Oct 1st....and what is the impact on the oil prices. If Iran really have a agreement with USA on suspension of enrichment, will it lower it down further?
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