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LONDON : Oil prices rebounded by three dollars a barrel Tuesday after Libya called on crude producers to cut output to protect their incomes if the market continued trading at current levels.
Crude oil futures have in recent days traded within a band of around between 80 and 95 dollars a barrel, well off their recent highs of 147 dollars reached in July.
New York's main contract, light sweet crude for delivery in November, jumped 3.11 dollars to 90.92 dollars a barrel in electronic deals on Tuesday, recovering from sharp falls suffered Monday.
Brent North Sea crude for November gained 2.36 dollars to 86.04 dollars a barrel.
Oil had nosedived under 90 dollars per barrel Monday, hitting eight-month low points, as deepening global financial turmoil and plunging stock markets raised fears about slowing demand.
"If the price level continues as it is we are seriously thinking of cutting down our production and calling other member countries in OPEC, and non-OPEC producing countries, to cut their production to safeguard their incomes," Shukri Ghanem told AFP by telephone.
"We are very much worried about this drop of the price," added Ghanem, who is Libya's representative in the Organization of Petroleum Exporting Countries (OPEC).
"We will think that all producing countries should take a unified view and should try to do something to stop the deterioration of the prices," said Ghanem, who is also chairman of the Libyan National Oil Corporation (NOC).
Lower oil prices translate into falling revenues for members of the 13-nation OPEC cartel.
Ghanem also told AFP that he would support an emergency meeting of OPEC oil ministers to discuss the issue.
In September, OPEC decided to cut its production of 520,000 barrels of oil per day, to sustain oil prices above 100 dollars a barrel.
The Libyan comments come one day after OPEC vice president Galo Chiriboga, who is Ecuador's oil minister, said that volatile world financial markets could affect oil prices and force the cartel to take action.
The market was also bolstered on Tuesday by growing hopes that the world's central banks could cut their interest rates in a bid to boost troubled financial markets.
"Prices were higher (on Tuesday) amid technical buying, and growing optimism global central banks may cut rates to ease fears, after the Reserve Bank of Australia slashed interest rates by 1.0 percent," said Sucden analyst Nimit Khamar.
The cost of crude oil has plummeted by about 40 percent since striking record heights above 147 dollars in July, as the market has been dragged down by fears of weakening economic growth and slowing demand.
Capital Economics analyst Julian Jessop forecast that prices could soon slump to 80 dollars per barrel.
"To our mind, prices much above 100 dollars per barrel are now clearly unsustainable," said Jessop. "We think that oil prices will decline to 80 dollars per barrel in the coming weeks and perhaps as low as 50 dollars in the coming year."
- AFP /ls
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