Oil prices dip, but stay above US$61

13-Dec-06

Oil prices took a dip, but continued to stay above US$61 a barrel on Tuesday as the market awaits OPEC's decision on further production cuts later this week. Recent data from the International Energy Agency showed stocks at the end of September, among the 30 members of the Organization for Economic Cooperation and Development held at 2.76 billion barrels, the highest level in almost 8 years and 4.5% higher than a year ago. Light sweet crude for January delivery dipped to US$61.02 a barrel on the New York Mercantile Exchange and January Brent crude on London's ICE Futures exchange slipped to US$61.52 a barrel. OPEC Ministers, gathered in Abuja, Nigeria, continue to send mixed messages about the production cut. Saudi Oil Minister has recently expressed concerns about excessively high oil inventories in major consuming nations. Minister from Qatar has expressed concern about the effects of a weaker dollar on the purchasing power in Europe and beyond. Minister from UAE has expressed that there would be no crude production cut by OPEC unless "absolutely necessary", adding that current oil prices around $60 a barrel are reasonable. Few OPEC officials have been pushing a cut in output on top of the production cut of 1.2 million bpd approved in October. Expectations of milder temperatures in the United States have also been affecting prices. Temperatures in the Northeast, the USA's largest heating oil market, were expected to moderate this week, with above-normal temperatures through most of the nation.