Oil prices back at US$58 in Asia, after a brief dip

19-Oct-06

As traders await the outcome of an emergency OPEC meeting to discuss a possible production cut oil prices rose. Light, sweet crude for November delivery rose to US$57.92 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore, after falling to US$57.65 a barrel Wednesday. This rise followed a drop of more than a dollar per barrel on release of U.S. government data that showed a large increase in domestic inventories of crude. OPEC is expected to discuss production quotas and a possible cut of 1 million bpd as oil prices have fallen by more than 25% since a mid-July. Another point of interest will be whether the cartel plans to reduce its official output quota or to reduce production based on actual output levels. The U.S. federal Energy Information Administration, in its latest weekly report, said crude oil supplies grew last week by 5.1 million barrels to 335.6 million barrels (7% above year ago levels). Distillates, including heating oil, was 15% above year ago levels at 145.4 million barrels.