BEIJING, Mar. 10 (Xinhuanet)-- Crude oil rose for the sixth day after surging to within US$1 of an all-time high in New York and to a record in London amid speculation that OPEC will do little to rein in prices at a meeting in Iran.
OPEC, which meets on March 16, has said this week that markets are well supplied with oil, even though prices have risen nearly 50 per cent in the past year.
The group does not need to boost output because demand may fall in the second quarter, Agence France-Presse cited Iran's OPEC representative Bijan Hossein Kazempour Ardebili as saying on Tuesday.
"OPEC isn't running fast enough to meet this train of demand that's growing without any sign of a slowdown," said Gal Luft, executive director of the Washington-based Institute for the Analysis of Global Security. "There's concern that spare capacity will not be able to compensate for any disruption."
Crude oil for April delivery rose as much as 33 US cents, or 0.6 per cent, to US$54.92 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at US$54.83 at 12:30 pm Singapore time.
On Tuesday, the April contract settled at US$54.59 a barrel, the highest since October 26, when prices closed at a record US$55.17.
In London, the April Brent crude-oil futures touched US$53.30 a barrel on Tuesday, the highest since the contract was introduced in 1988.
Global oil demand may average 84 million barrels a day in 2005, while daily production in January was at 83.6 million barrels, the International Energy Agency said last month.
The Organization of Petroleum Exporting Countries, which pumps about 40 per cent of the world's oil, is scheduled to meet in Isfahan, Iran, to discuss second-quarter output.
"I don't see OPEC doing anything but rubber-stamping what they're doing now," said Alan Stanley, an independent oil trader in Houston, Texas.
The group is meeting demand by "selling to everybody that wants barrels."
The US Energy Department's weekly petroleum report later yesterday probably showed the country's crude oil stockpile gained 1.7 million barrels last week from 299.4 million the week before, according to the median forecast from a Bloomberg survey of 14 analysts. Supplies in last week's report were 9.4 per cent higher than a year earlier.
"If we get a 3 million-barrel build in crude, that may take some of the steam out of prices," Stanley said.
OPEC is concerned at the 18 per cent gain in prices the past month, given world supplies are above their five-year average, President Sheikh Ahmad Fahd al-Ahmad al-Sabah said in a statement on March 6. OPEC is pumping 29.5 million barrels a day and can pump an extra 2 million if needed, he said.
"The only thing that will get us to move decisively lower is a global recession that would reduce demand," said Kyle Cooper, an analyst with Citigroup Inc in Houston. "OPEC is pretty powerless to lower prices. If OPEC boosts output, the bulls will say that there will be less spare capacity."
(Source: China Daily/by Sri Jegarajah and Gavin Evans)