LONDON, MARCH 3: Oil romped around nine-year highs on Friday as Opecassurances of extra production failed to calm worries over an increasinglytight US gasoline market. Dealers said they would need details of plannedhikes in Opec output before taking the heat out of prices that economistsfear are stocking inflationary pressures in the global economy."Until Opec tells us a number, the market will stay extremely firm," onedealer complained of the secrecy with which producers have veiled productionplans. The North Sea benchmark Brent crude was trading 15 cents easier at$29.06 a barrel, well within sight of a new nine year peak of $29.47 reachedon Thursday.
Bulls also drew comfort from the start of a Venezuelan oil workers' strikeand refinery problems in the United States that may curb gasolineproduction, dealers said. Opec secretary general Rilwanu Lukman said thethe organisation would definitely raise output but the timing and increasehad to be carefully managed.
"Ultimately we will have to increase output by a certain quantity...but thequestion is the timing and the quantity," he said. "We have to be carefulnot to create a problem in the opposite direction. We don't want prices togo back to $10 a barrel."
His words gave little insight into details of output volumes being studiedby Opec to ease markets and give relief to key customer the United States,the world's largest oil consumer.
Opec members Saudi Arabia and Venezuela and non-Opec Mexico met in London onThursday to draft a proposal for the cartel to consider at its March 27meeting. The trio said they favoured an output increase but refused tocomment on the timing or amount.
Delegates said the three favour a rise in Opec output of 1.2 million barrelsper day (bpd) from April plus another 5,00,000 bpd later if required. Themove would allow Mexico another 90,000 bpd in exports from April. But themarket is anxious that Opec will not act rapidly enough when it meets onMarch 27 to ease output curbs that expire at the end of that month.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.