Oil Prices Stable before OPEC Meet

World crude prices stabilized Tuesday as traders focused on an upcoming output meeting of OPEC members in Qatar, and on the eve of the weekly update on US energy stockpiles.

New York's main contract, light sweet crude for delivery in November, gave up 49 cents to 59.45 dollars per barrel in pit trading. That followed a bumper gain of 1.37 dollars on Monday.

In London on Tuesday, Brent North Sea crude for December delivery rose six cents to 61.72 dollars per barrel in electronic deals. Brent's November contract expired Monday, priced at 59.96 dollars.

Crude futures had rebounded strongly on Monday after Qatar's energy minister announced an extraordinary meeting of OPEC to be held in Doha this Thursday to discuss a cut in production to check the recent fall in the price of crude oil.

The 11 member countries of the Organization of Petroleum Exporting Countries were to discuss details of the reduction of 1.0 million bpd, which was agreed in principle last week amid plunging crude futures.

Analysts have expressed uncertainty over whether OPEC's production cuts will come from the cartel's current output quota of 28.0 million bpd, or from actual output levels of around 27.5 million bpd.

A fall in output to 27 million bpd would in reality mean a reduction of just 500,000 barrels a day, which some member states may deem to be insufficient.

Over the past two weeks, mixed signals from OPEC had only served to drive crude prices down more.

Last Thursday, New York crude oil had plunged to 57.22 dollars. That was the lowest point since December 2005 and marked a 27-percent plunge from its record July peak of 78.40 dollars.

Meanwhile, traders were awaiting Wednesday's traditional weekly update on crude oil inventories in the United States, which is the world's biggest consumer of energy.

All eyes will be on the figure for distillates -- which include crucial heating fuel and diesel -- because demand for heating oils hits a peak during the forthcoming northern hemisphere winter.

Crude futures found limited support Tuesday from ongoing production problems in Norway. The 200,000-bpd Snorre oilfield remained shut after Norway's oil safety watchdog ordered a closure of several oilfields on Friday because of problems with lifeboats.

Simmering international geopolitical tensions over North Korea also drew  traders' attention.

The United States on Tuesday warned North Korea against conducting a second nuclear test and flatly dismissed its claim that UN sanctions imposed after its first test amounted to a declaration of war.

Although the reclusive state is not an oil producing nation, market participants remain worried that the crisis could encourage Iran, the world's fourth biggest oil producer, to pursue its own nuclear programme.

Source: AFP

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