Stabilisation of oil prices will come soon

Opec wants a faster retreat in oil prices and will discuss whether to raise its official oil output ceiling at its September 15 meeting, cartel president Purnomo Yusgiantoro said on Thursday. “That is part of the agenda that will be discussed. If we consider that needs to be done we will inventory how much spare capacity that we have from each member of Opec, so we can increase our quota,” he told reporters. “We will also meet with non-Opec members and other oil producers to discuss ways to cool down the oil price and to stabilise the price,” he said. He said the current drop in global oil prices was not moving fast enough. Crude oil prices have fallen by nearly $6 from last week’s record highs of $49.40 a barrel for US light crude. US oil price rose 43 cents to $43.90 after plunging almost four per cent on Wednesday, as fears over supply disruptions in Iraq resurfaced after saboteurs attacked overnight a group of eight pipelines linking a main southern oilfield to a pumping station near the city of Basra, an oil official said on Thursday. The market was also unnerved by a mortar attack on the crowded main mosque in the Iraqi town of Kufa that left “many dead” on Thursday, as hundreds of supporters of anti-US cleric Moqtada al-Sadr gathered at the mosque. “The oil price is falling but not much at the moment. The downturn is slow. We hope the price will continue to fall. We hope it can fall to around $30 per barrel. That is good enough,” Mr Purnomo said, referring to the Opec reference crude price, which dropped to $41.43 a barrel on Tuesday from Monday’s $42.27, informs Reuter. According to the Australian, world oil prices skidded again overnight as a ceasefire in the explosive Iraqi city of Najaf encouraged traders to pursue a dramatic retreat. New York's benchmark contract, light sweet crude for delivery in October, fell 37 cents to $US43.10 a barrel - down 13 per cent from last Friday's all-time high of $US49.40. Brent North Sea crude for October dropped 35 cents to $US40.33. "There was the news of the ceasefire in Iraq," said AG Edwards market analyst Bill O'Grady. But it was impossible to be sure that a relaxation of tensions in Najaf would halt attacks on Iraqi pipelines, he said. Rebel cleric Moqtada Sadr agreed to a peace deal offered by Iraq's Shiite spiritual leader Grand Ayatollah Ali al-Sistani to end fighting in Najaf, though 74 people were killed in neighbouring Kufa. The momentum of the oil price slide appeared to be slowing following a steep slump the previous day, Mr O'Grady said. But he and other traders refused to rule out a new attempt at $US50 a barrel in New York. The Organization of Petroleum Exporting Countries (OPEC) reportedly expects to discuss collective efforts with the non-OPEC members and oil companies for stabilizing oil prices at its upcoming meeting next month. Media reports quoted the OPEC president, Purnomo Yusgiantoro, today saying that the oil cartel expected to see global oil prices declining to as low as $30 per barrel. The president said that the OPEC wants to bring together the non-OPEC members and oil companies to collectively try to stabilize oil prices. Purnomo Yusgiantoro reportedly said that the possibility of and the requirement for increasing the official output quota of OPEC members would be discussed at the cartel's upcoming meeting in Vienna, Austria, scheduled for September 14 this year. The US light crude price reached an intra-day lowest level of $42.50 per barrel at the New York Mercantile Exchange, while the London Brent crude price reached an intra-day lowest level of $39.67 at the International Petroleum Exchange, reports New Ratings. New Zealand Herald

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