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Oil Climbs as OPEC Says No Output Hike

Reuters
Thursday, 2 Aug 2007 | 3:50 PM ET

Oil rose near an all-time high on Thursday, as OPEC officials said the producer group would not hike output, despite concerns of a supply shortfall.

U.S. light, sweet crude (delayed) gained 33 cents to trade at $76.86 per barrel, after briefly hitting a record high of $78.77 on Wednesday.

London Brent crude (delayed) rose 33 cents to $75.68.

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"OPEC comments early today signal they don't want to pump more oil and that is the main reason crude prices are rising again," said Phil Flynn, analyst at Alaron Trading in Chicago.

Qatar's Oil Minister Abdullah al-Attiyah said Thursday OPEC can do nothing about the high price of oil, and said there is no shortage of crude in the market.

Earlier, an OPEC delegate said energy markets were adequately supplied and that additional oil would not be needed in the fourth quarter.

OPEC's assessment comes in stark contrast to the views of some energy analysts, that prices could hit $95 this year if the cartel doesn't raise output because demand is rising faster than production levels.

U.S. Energy Secretary Sam Bodman, who has called on OPEC to raise output at its next meeting in September, said on Thursday $80-per-barrel oil could impact the U.S. economy.

Crude surged early Wednesday to its record peak after weekly U.S. inventory data showed an unexpectedly large draw in crude stockpiles as refineries raised throughputs.

But later Wednesday, markets shifted focus to a build in U.S. gasoline stocks, putting the market into negative territory.

"The U.S. oil market has finally turned a seasonal corner," said Antoine Halff of Fimat energy.

"The data's twin takeaway is clear: tightness in global crude stocks is quickly spreading to the United States... At the same time, recovering throughputs are causing U.S. crude and product stocks to rebalance."

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