Oil prices crept higher here on Tuesday supported by fund buying and concerns that North Sea crude supplies would be affected by adverse weather conditions, analysts said.
A barrel of Brent North Sea reference crude for March delivery was selling for $28.59, from $28.45 at the previous close. Prices peaked at $29.20 a barrel on Monday.
But in New York, the benchmark light sweet crude March contract slipped 20 cents in early deals to $30.35 a barrel.
The price of the Brent March contract was lifted by fund buyers shifting in from the April contract, ABN Amro trader Mike Ingram said.
Prices also rose on the back of concerns that Brent supplies from the North Sea might be disrupted by bad weather. "Apparently because of the freezing weather in Norway there has been one or two problems with the output from the North Sea," Ingram said.
The market was awaiting the latest estimates of US stock levels published every Tuesday by the American Petroleum Institute (API). ABN Amro's Ingram said: "There seems to be a fairly strong opinion that there will be some small builds in crude, but for (oil-based) products they seem to be looking for draws for both the heating oil and the gasoline."
The rebound in prices wiped out early losses prompted by assurances from Saudi Arabian oil minister Ali al-Nuaimi that there was no need for further output cuts from the Organisation of Petroleum Exporting Countries (OPEC).
"There is no need for additional steps by any actor," al-Nuaimi said in Oslo on Monday, adding that the market was currently selling at a "reasonable price."
Al-Nuaimi is a key player within OPEC, the oil-exporting organisation which decided last month to slash output by more than five percent to rescue prices that had fallen towards $20 a barrel.
OPEC nations also warned that further output cuts could be in the pipeline if prices did not bounce back up to acceptable levels. OPEC officially considers a range of $22-28 to be reasonable.
The composite price of seven world cruds which the Organization of Petroleum Exporting Countries (OPEC) uses as a guideline for production policy rose to $26.79 on Monday from 26.58 dollars on Friday, the Vienna-based OPECNA agency said.
OPEC member Yemen said on Tuesday that it would sign prospecting agreements with foreign oil majors aimed at doubling production to one million barrels per day (bpd) over five years and boosting reserves.
"Our main objective is to increase reserves and boost production to one million bpd within five years," Oil Minister Mohammad al-Wajih said in an interview with the Al-Hayat newspaper.—AFP.
©--Agence France Presse 2001.
© 2001 Mena Report (www.menareport.com)
