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APR 20 2013

Oil prices rise on OPEC cut speculation

  • Economic Times, ET Bureau / Hyderabad
  • Created: Sat 20th APR 2013

Brent prices had hit multi-month lows this week after China said its economy grew just 7.7% in the January-March quarter

Oil prices rose Friday, with Brent back above $100, on speculation that OPEC plans to cut output – and at the end of a week in which crude futures have tumbled on weakening Chinese economic growth.

Brent North Sea crude for delivery in June gained $1.20 to trade at $100.33 a barrel approaching midday in London, after falling below the $100 threshold earlier in the week following weak economic growth data out of China.

Elsewhere Friday, New York’s main contract, light sweet crude for delivery in May added 99 cents to $88.72 a barrel.

“There are rumours that OPEC may call for an emergency meeting to discuss output if Brent prices stay below $100 a barrel,” Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore, told AFP.

“This is boosting oil prices in the near term.”

Brent prices had hit multi-month lows this week after China said its economy grew just 7.7% in the January-March quarter, slower than expected and worse than during the previous three months.

Poor figures from the United States added to selling pressure for crude.

The Organization of Petroleum Exporting Countries (OPEC) earlier this month kept its global demand forecasts for 2012 and 2013 virtually unchanged, with China expected to contribute the most to growth while industrialised countries appeared to be headed for a decline.

Sanctions-hit Iran, OPEC’s fourth largest producer, said on Wednesday that it considers the “logical” price of crude to be around $100-$120 a barrel.

Analysts said the $100 price for Brent is considered ideal by Saudi Arabia, the world’s top oil exporter, and falling below it could prompt OPEC to cut back on output.

Tags

Oil China Petrol United States Saudi Arabia Petroleum Organization of Petroleum Exporting Countries Iran

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