New York, Dec 05: World oil prices edged tentatively higher as the Organisation of Petroleum Exporting Countries held output steady but hinted at a cut early next year. New York's reference light sweet crude contract for delivery in January rose 16 Cents yesterday to USD 31.26 a barrel.
Brent North Sea crude oil for January, which had slumped when the OPEC decision to hold output steady was announced, later recovered lost ground to close 9 Cents higher at USD 29.23.
OPEC ministers decided in Vienna to maintain an oil production ceiling of 24.5 million barrels per day for the moment, but signalled they would cut it in the second quarter of 2004 to keep prices firm.
OPEC said in a statement it had decided to hold production steady because the market was "well supplied".
But a "significant supply overhang (is) expected to exert considerable pressure on oil prices" in the second quarter of 2004, the cartel said, warning it would take any steps needed to maintain market stability.
OPEC secretary general Alvaro Silva-Calderon estimated excess supply would reach 2.4 million barrels per day (BPD) in the second quarter of 2004 as winter in the northern hemisphere drew to an end and because non-OPEC producing countries were expected to boost production.
"We have to deal with the situation," said Calderon.
Kuwaiti oil minister Ahmad Fahad al-Sabah said he believed a cut would be needed for the second quarter. Bureau Report