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Crude oil futures erase losses amid OPEC uncertainty

Published 06/07/2011, 03:12 AM
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Investing.com – Crude oil futures erased losses on Tuesday, rebounding from a two-day low amid uncertainty ahead of an upcoming meeting of the Organization of the Petroleum Exporting Countries, while a soft U.S. dollar also lent support.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at USD98.97 a barrel during late Asian trade, edging 0.12% higher.  

It earlier fell as much as 0.6% to trade at USD98.35 a barrel, the lowest price since June 3. 

Markets were awaiting Wednesday's OPEC meeting in Vienna to see whether the group decides to increase its current output quota. 

Saudi Arabia’s oil minister Ali al-Naimi told a Saudi newspaper on Monday that it was too early to say if OPEC would raise production quotas this week. He had stated over the weekend that the group needed to increase production by “at least one million barrels a day”.

Iran’s deputy petroleum minister, Ahmed Ghalehbani, said Monday that his country was "okay" with current oil output levels, and that Iran's stance at the OPEC meeting will be to hold production quotas at current levels.

Venezuelan Oil Minister Rafael Ramirez also said Monday that the group was unlikely to raise production, echoing comments made by Qatar and Algeria’s OPEC delegates over the weekend.

Saudi Arabia is the world’s biggest crude producer and exporter, while Iran, which holds OPEC's rotating presidency, is the second largest oil producer among OPEC members.

The International Energy Agency reiterated its call on oil producers to boost supplies in the face of fears that high prices could damage the global economic recovery.

The IEA said in a report on Monday that there is a “clear and urgent need for additional supplies on a more competitive basis to be made available to refiners to prevent a further tightening of the market.”

Meanwhile, the dollar index was down 0.38% to trade at 74.13. Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
 
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery added 0.3% to trade at USD114.58 a barrel, up USD15.61 on its U.S. counterpart.

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