LONDON: Oil prices climbed back above $100 on Wednesday as OPEC ministers began a vital meeting at which they were widely expected to hold current output levels despite calls from the West for a hike, traders said.
New York s main contract, light sweet crude for delivery in April, was up $1 to $100.52 per barrel.
Brent North Sea crude for April delivery rose 75 cents to $98.27. Ministers of the Organization of Petroleum Exporting Countries met shortly after 10:00 am in Vienna, as Saudi Arabia, the cartel s most influential member, said there was no need to hike production.
The likelihood is that the group will rollover production, said analysts at oil consultancy John Hall Associates.
Members though are wary of a second quarter glut which may well weigh on prices … Accordingly, hawks within the group would prefer to see a cut to head off falling demand after winter, they wrote.
A rollover would see OPEC hold daily output at the current level of 29.67 million barrels.
Demand for heating fuel traditionally falls during the second quarter as warmer temperatures come to Europe and the United States after the winter.
The cartel would normally want to trim (output) but the high price basically precludes such a proactive move, said Citigroup analyst Tim Evans.
We think prices have to fall first … before OPEC will risk reducing output. On Monday, New York crude had struck a record high $103.95 on the back of the plunging US currency, traders said.
The euro hit a record high against the dollar that day, a trend that encourages crude demand as dollar-denominated oil becomes cheaper for buyers with stronger currencies. -AFP