Oil eased to under $105 a barrel on Friday, but stayed within sight of its record high from the previous session, with a tumbling United States dollar, fund flows and Opec’s (the Organisation of the Petroleum Exporting Countries) reluctance to pump extra crude providing support.
US light crude for April delivery fell 59 cents to $104,88 a barrel by 9.10am GMT. It hit a new record high of $105,97 on Thursday.
London Brent crude fell 43 cents to $102,18 a barrel.
Prices jumped this week after a surprise fall in crude stocks in top oil consumer the US and after Opec decided against changing its output policy at its meeting in Vienna, despite consumers’ calls to pump more oil.
”Opec is keen to maintain oil prices. They do not have much spare capacity to bring crude onto the market,” said Gerard Burg of National Australia Bank in Sydney.
The oil exporters group, which pumps more than a third of the world’s oil, has long argued high oil prices do not reflect oil-market fundamentals and are being driven by speculation.
Influential Saudi Oil Minister Ali al-Naimi reiterated the assertion in remarks published on Friday, saying speculation was behind triple-digit oil and made it impossible for any organisation to control price movements.
”Today there is no link between oil [market] fundamentals and prices,” he told Moroccan newspaper Asharq al-Awast.
”The duty of oil exporters is to make sure that fundamentals are healthy,” said Naimi. ”If these fundamentals were stable and fulfil market needs, then there is no need to raise or decrease production,” he added.
Opec’s argument that there is enough oil has been backed by steadily rising crude inventories in the US, but a US government report released after the group’s meeting on Wednesday showed crude stocks fell by 3,1-million barrels last week, against analysts’ forecasts for an increase.
Opec will next meet in September, although ministers could confer informally at a conference between consumers and producers in Rome on April 20 to 22. — Reuters