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Oil prices rise on hope China's stimulus will stoke demand
New York (AFP) Nov 10, 2008 Crude oil prices extended last week's rally Monday, with sentiment boosted by hopes that China's huge economic stimulus package will lift energy demand. On the New York Mercantile Exchange, light sweet crude for delivery in December rose to 62.41 dollars a barrel, a gain of 1.37 dollars from its close Friday. In London, Brent North Sea crude for December climbed 1.73 dollars to settle at 59.08 dollars on London's InterContinental Exchange. China's four-trillion-yuan (586-billion-dollar) stimulus package aimed at boosting its faltering economy, announced Sunday, would mean greater demand for commodities including oil, dealers said. "China's stimulus package is significant," said David Moore at the Commonwealth Bank of Australia. "It will support China's economic growth and therefore demand for oil." The Asian giant is a major buyer of commodities and its thirst for oil to fuel runaway economic growth in recent years was a key factor behind the rise in prices to record levels above 147 dollars a barrel in July. But Mike Fitzpatrick, analyst at MF Global, cautioned that the rally over the stimulus may be short-lived given the worldwide financial crisis. "Once the shock of the surprise wears off, some of the gains will probably be given back," Fitzgerald said. "Sellers appear to run out of momentum near 60 dollars, with OPEC officials talking up prices again that will probably remain the case," he added. OPEC president Chakib Khelil indicated over the weekend another round of production cuts may occur should oil prices remain below the cartel's preferred range of 70 to 90 dollars. "We have always said that our objective is 70 to 90 dollars a barrel," Khelil, who is also Algeria's energy minister, said Saturday at an energy industry seminar in Algiers. "If the barrel price does not reach this level, there will probably be another (production) cutback," he said, adding that there must be consensus among all OPEC nations, "and everyone has their own interests." The Organization of the Petroleum Exporting Countries (OPEC), which pumps more than 40 percent of the world's crude, announced in October that it would cut daily output by 1.5 million barrels to 27.3 million barrels per day from November. OPEC's next meeting is scheduled to take place in Oran, Algeria, on December 17. OPEC's Arab members will meet in Cairo on November 29, Khelil said. burs-vs/sg Related Links Powering The World in the 21st Century at Energy-Daily.com
Myanmar removes rig from disputed waters: Bangladesh
Dhaka (AFP) Nov 9, 2008Myanmar removed a rig from a gas-rich stretch of the Bay of Bengal on Sunday after Bangladesh sent warships to protest against exploration in the disputed waters, Dhaka's foreign minister said. |
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