Oil Rises Further Above $74, OPEC Keeps Lid on Supplies
Oil climbed further above $74 on Monday, within sight of its record high, as OPEC kept a lid on output in the run-up to its Sept. 11 ministerial meeting.
Market participants were keeping watch of a potentially catastrophic Category 5 storm in the Atlantic Ocean. Current projections show it avoiding offshore U.S. oil and gas fields.
U.S. light, sweet crude for October delivery was up. The U.S. Labor Day holiday shut the New York trading floor but electronic trade continued as usual. London Brent crude rose.
OPEC kept oil production restricted in August, a Reuters survey found, suggesting the exporter group is intent on retaining output curbs when it gathers next week in Vienna.
Consumer nations have been calling for more oil as the price climbs back towards its Aug. 1 all-time high of $78.77. Oil analysts also say OPEC must boost supplies to keep pace with growing demand this winter.
"...We believe that growing evidence that the oil market is tightening fast is the key force behind the recent push up in prices," said a Barclays Capital report.
OPEC has repeatedly said shortfalls of refined products are not its problem and the world is amply supplied with crude.
"In my opinion, supply is sufficient," Qatari Oil Minister Abdullah al-Attiyah told Reuters on Monday. "I don't think OPEC has anything to do at the meeting next week."
The 10 OPEC countries subject to output restrictions -- all except Iraq and new member Angola -- kept production little changed at 26.74 million barrels per day (bpd) in August, the Reuters survey showed.
Total OPEC supply fell because of a drop in Iraqi exports.
The Organization of the Petroleum Exporting Countries, source of more than a third of the world's oil, agreed last year to lower production by 1.2 million bpd from Nov. 1 and by a further 500,000 bpd from Feb. 1.
U.S. Gulf of Mexico oil and natural gas producers were monitoring Hurricane Felix as it churned through the Caribbean Sea, but none has reported reduced offshore production or evacuated workers to onshore locations.
Felix, with winds of 165 mph (270 kph), was threatening Central America but it was unclear whether it would be able to re-emerge over the Bay of Campeche and strengthen again in the Gulf of Mexico.