LONDON - Oil prices edged higher after Saudi Arabia's oil minister said OPEC might cut output
further when it meets on Dec. 14.
The dollar's slide to a 20-month low against the euro
provided some support across the commodities complex as it
encouraged funds to seek alternative investments, analysts said.
But uncertainty and technical weakness limited gains in oil.
U.S. crude was trading 21 cents higher at $59.45 a barrel by
London Brent crude fell 40 cents to $59.63.
"Oil is the underdog of commodities at the moment," said
Olivier Jakob of Petromatrix. "The fundamentals are still not
A further rise in U.S. crude inventories pushed prices lower
last Wednesday -- the last day of open outcry trade in New York
before the two-day Thanksgiving holiday. On Thursday and Friday,
U.S. futures were only traded electronically.
High stock levels have worried the Organization of the
Petroleum Exporting Countries.
The producer group's most influential voice, Saudi Oil
Minister Ali al-Naimi, held out the prospect of a further output
cut when the group meets next month in Abuja.
At an emergency meeting in Doha in October, OPEC agreed to
remove 1.2 million barrels per day from oversupplied markets --
the first cut in two years. Since then, OPEC ministers have
lined up in favour of a further reduction to underpin prices.
"We must look at the impact of the measures decided in Doha.
If they are adequate, we will be satisfied, if they are not we
will act again and the aim is to bring stability back to the
market," Naimi told reporters.
Concerns about a weakening U.S. economy pushed the dollar to
a 20-month low against the euro and a three-month low against
the yen on Monday, while helping to spur gold to its highest for
more than three months.
But oil remained trapped in its two-month trading rut of
$58-$62 a barrel and showed few signs of resuming a climb back
toward a record high for U.S. crude of $78.40 a barrel hit in
For the longer term, many analysts remain bullish.
"There are probably more reasons to be bullish than
bearish," said Angus McPhail of investment company Alliance
Trust, citing the prospect of winter fuel demand as well as
mounting tension, notably in oil producer Iraq.