Oil Prices Jump as OPEC Sets Talks

OPEC’s President Rilwanu Lukman said Wednesday that the group’s price committee will meet in Vienna early next month to buttress efforts by the 13-nation cartel to defend falling crude oil prices.

The Nigerian oil minister announced the decision at a news conference in Lagos that was preceded by intense speculation on world markets about what the Organization of Petroleum Exporting Countries would do about sagging prices.

Oil traders welcomed that news as a way to help prop up the sagging market, whose ups and downs recently have been based on rumors.

“It tells us they (OPEC members) are concerned about prices and . . . about their economic incomes,” said Madison Galbraith, senior trader with Merrill Lynch Energy Futures.

On the New York Mercantile Exchange, contracts for May delivery of West Texas Intermediate, the benchmark U.S. grade of crude, settled at $16.86 per 42-gallon barrel, up 49 cents from Tuesday. The contract rose 6 cents on Tuesday.

In Europe, the price of Britain’s benchmark Brent crude oil jumped 35 cents a barrel on the spot market after the news but trimmed gains later to end the day up 20 cents at $15.20 for immediate delivery, oil traders said.

Saudi Oil Minister Hisham Nazer also called for talks, ending speculation about whether Saudi Arabia, OPEC’s biggest producer, was willing to have a meeting of the panel.

“To stop any confusion, the kingdom of Saudi Arabia requests the president to hold an immediate meeting of the price monitoring committee to discuss the situation in all aspects,” Nazer was quoted as saying by the Saudi Press Agency.

Blames Foreign Analysts

Galbraith said the comment by Nazer was another bullish factor for the oil market.

Lukman, who took a swipe at foreign analysts and blamed them in part for sliding prices, said the price committee would decide if any action was needed to strengthen the market.

“I wish to reassure you that OPEC member countries are still determined in their resolve to collectively defend the agreement they painstakingly reached in December, 1987,” Lukman said, referring to the last full ministerial meeting.

That gathering set a ceiling of 15.06 million barrels a day for 12 nations excluding Iraq, which refused to sign, and maintained an official selling price of $18 a barrel.

But prices have fallen about $4 below that level, due to many factors, and OPEC was under pressure to announce credible steps to halt the slide.

Convening the price committee, whose members are Saudi Arabia, Algeria, Indonesia, Venezuela and Nigeria, was one such option.