Oil Prices Rise on Reports of Kuwaiti Cuts
Oil prices rose another notch on world markets Thursday amid reports that Kuwait, an influential Persian Gulf member of the Organization of Petroleum Exporting Countries, is suspending spot oil sales to scale back production to within its official cartel quota.
The United Arab Emirates’ Dubai Light--the key OPEC crude from the Persian Gulf--jumped by 45 cents to $17.15 a barrel on the European spot market, where oil is sold to the highest bidder.
Analysts said prices also were buoyed by hopes that OPEC may take some steps to reduce its surplus production when two of its key committees meet in Vienna Sept. 7.
On the New York Mercantile Exchange, West Texas Intermediate--the benchmark U.S. crude for immediate delivery--gained 18 cents to $19.64 a barrel in a volatile session. During the day, the crude traded as low as $19.20 before a late afternoon buying burst.
U.S. Crude at 4-Year Low
The U.S. crude sank to a four-year low of $18.60 a barrel Monday, but has rebounded by $1.64 a barrel in the past three sessions. It peaked at $22.75 a barrel in mid-July, when U.S. Navy ships were preparing to escort Kuwaiti oil tankers through the Persian Gulf as protection against Iranian attack.
“It’s a very confused, choppy and uncertain market right now,” said Peter Beutel, an analyst at Elders Futures Inc. in New York.
OPEC President Rilwanu Lukman called the pricing and production committees into session after the authoritative Middle East Economic Survey reported Monday that the 13-nation cartel was producing 19.7 million barrels a day.
On June 27, OPEC agreed to limit production to 16.6 million barrels a day for the second half of the year to defend its $18-a-barrel benchmark price, a goal imperiled by cheating on national output quotas.
