(AFP) – Jan 31, 2008
LONDON (AFP) — World oil prices fell heavily on Thursday, the eve of a crucial OPEC output meeting, as traders looked to rising energy reserves in key consumer the United States.
New York's main contract, light sweet crude for delivery in March, shed 1.16 dollars to 91.17 dollars per barrel.
Brent North Sea crude for March delivery fell 1.07 dollars to 91.46 dollars a barrel.
The oil market was boosted on Wednesday after the US Federal Reserve slashed a half-point from its key interest rate to ward off recessionary risks in the US economy.
But on Thursday, traders retraced their steps as they concentrated on news of buoyant US energy stockpiles.
"Once anticipation of a move from the US central bank was over, investors turned their attention back to US fuel inventories figures, showing yet another rise in crude stocks," said Sucden analyst Andrey Kryuchenkov.
The US Energy Information Administration said that American crude inventories had jumped 3.6 million barrels in the week ending January 25.
It was the third straight week of increases and beat analysts' consensus forecasts for a gain of 2.0 million barrels.
Elsewhere, there are indications that OPEC ministers will agree to no change in production at their forthcoming meeting in Vienna on Friday.
OPEC might debate whether pumping more oil would help revive the world economy when they meet here even though ministers favoured no change, the cartel's chief said on Thursday.
US President George W. Bush recently called on the Organisation of Petroleum Exporting Countries to increase output at its production meeting to help reduce high oil prices which he claims are weighing on an already weak economy.
The price of New York crude had hit a record high point of 100.09 dollars a barrel on January 4.
On Thursday it was still almost double the level of a year ago.
Asked by journalists on Thursday whether there could be a debate at OPEC's upcoming meeting on whether to raise output or keep production steady, OPEC President and Algeria's Energy Minister Chakib Khelil replied: "Yes."
Some members of OPEC, which produces 40 percent of world oil, were "more sensitive to political pressure", Khelil said, in an apparent reference to the Gulf States and Saudi Arabia.
Nevertheless, he himself believed that "an increase would not help the economy."
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