Oil prices rise in reaction to statement by Iran's oil minister

12-Jun-07

Oil prices saw an upswing on Monday in reaction to a statement by Iran's oil minister that OPEC has no plans to release more oil into the market ahead of its next policy meeting in September. OPEC opines that there is adequate crude oil in the market and commercial oil inventories are at a high level. Also supporting prices were reports that Saudi Arabia had notified Asian and European customers of maintaining July shipments at the same levels as June levels, some 10% below contracted supplies. This indicates that Saudi Arabia is still limiting supplies in line with OPEC cuts, despite persistently high oil prices. Last week, resumption of exports from Oman had weighed on crude prices, but while the cyclone delayed shipments for three days, it did not reduce oil production from the ground. Light, sweet crude for July delivery moved up to US$65.11 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe, after dropping by over two dollars on Friday. Brent crude for July delivery rose 31 cents to $68.91 a barrel on the ICE Futures exchange in London.