NEW YORK, Dec 10: Oil prices shot above 61 dollars a barrel on Friday for the first time in more than a month before reversing course on profit-taking before an Opec meeting next week.
Markets were wary of the one-day meeting of the 11-nation Opec on Monday in Kuwait City to discuss output, dealers said.
New York’s main contract, light sweet crude for delivery in January, slumped 1.27 dollars to close at $9.39 a barrel.
The contract had earlier spiked above 61 dollars as a blanket of snow smothered the US northeast, igniting forecasts of higher demand for heating fuel, analysts said.
In London, the price of Brent North Sea crude for January delivery fell 1.36 dollars to end at $7.31 a barrel.
The colder (US) weather is blamed for the increase but there is little to worry about from the current cold snap, Jim Williams at WTRG Energy said, arguing that US markets remain well supplied for heating oil.
In our opinion the futures market has overreacted to the cold weather, he said.
Sucden analysts said: “The market is now turning its attention towards the Opec seting next week in Kuwait to discuss supply policy.
Opec members Algeria and Kuwait said Friday they support maintaining an extra two million barrels per day (bpd) allocated by the cartel in September to counter hurricane disruptions to North American output.
Kuwait’s energy minister and current Opec chief Sheikh Ahmad Fahd al-Sabah said also that the cartel would hold an extraordinary meeting in January.
The price of oil hit an all-time high of $70.85 a barrel in New York on August 30 following Hurricane Katrina, which devastated refining and crude production facilities along the US Gulf Coast.
Prices had begun stronger Friday on colder weather forecasts that should bring greater demand for heating fuel, the Sucden analysts said.—AFP
