World oil prices rose on Monday on supply concerns as a new tropical storm threatened crude production in the Gulf of Mexico, while the Organisation of Petroleum Exporting Countries (Opec) looked set to maintain its current oil-production quota.
New York’s main contract, light sweet crude for delivery in October, climbed 64 cents to $63,64 per barrel during electronic trading.
In London, the price of Brent North Sea crude for November delivery gained 72 cents to $62,53 per barrel.
“The reason why we’re seeing stronger numbers this morning is this new storm coming in the Caribbean which could cause disruptions to the crude oil facilities in the Gulf of Mexico,” Prudential Bache trader Christopher Bellew said.
United States weather monitors issued a hurricane watch for Florida’s western islands on Sunday as Rita brewed in the western Atlantic.
“Rita is getting much better organised and strengthening as it nears the south-eastern Bahamas,” the National Hurricane Centre said in a public advisory on Sunday evening.
“Rita could become a category-one hurricane by late Monday,” the centre added.
On August 30, a day after Hurricane Katrina battered US oil facilities on the Gulf coast, New York’s main oil contract hit a record-high $70,85 per barrel, while in London Brent reached an all-time high $68,89 — leaving prices double the levels in 2003.
Prices have since retreated as a number of oil facilities came back on line and after the US and its industrial partners agreed to tap emergency reserves.
Meanwhile, the market was keeping a close eye on Opec, which began on Monday a two-day meeting in Vienna to decide over the oil cartel’s output.
Libyan Energy Secretary Fathi Hamed bin Shatwan said in the Austrian capital that Opec will maintain its current oil production quota and offer two million barrels per day in case of increased demand.
Asked whether there is a clear consensus among Opec’s 11 members on keeping the official quota at its current level of 28-million barrels per day, Shatwan said: “Well, we discuss this, we are going to discuss it at the conference. The idea [is] not to change the quota.”
Opec is under pressure to help curb near-record oil prices, but cartel members stressed that it is not the supply of crude but a lack of refining capacity that is at the root of the high prices. — AFP