Monday March 9, 12:32 PM
Oil price hits six-week peak on OPEC prospects
LONDON (AFP) - Oil prices hit a six-week high in New York on Monday on expectations that the Organization of Petroleum Exporting Countries will decide to cut output further this week, analysts said.
New York's main futures contract, light sweet crude for delivery in April, jumped to a six-week peak of 47.03 dollars a barrel in morning London trade.
The contract later stood at 45.82 dollars, up 30 cents from Friday's close, as profit-taking set in.
Brent North Sea crude for April fell 1.11 dollars to 43.74 dollars, pulled lower by concerns about falling demand for crude.
Analysts said prices also diverged because New York crude won support from recent falls in stockpiles at Cushing, Oklahoma, which is the delivery point for oil traded on the New York Mercantile Exchange (Nymex).
The OPEC cartel, which pumps 40 percent of the world's oil, is due to meet on Sunday for a crucial production meeting.
"Crude oil climbed to the highest in almost six weeks on speculation the Organization of Petroleum Exporting Countries will decide to reduce output in an effort to trim stockpiles and lift prices," said BetOnMarkets analyst Dave Evans.
"It seems like an attempt to break past the 50 dollar level is in the cards," he added.
OPEC slashed output late last year by 4.2 million barrels per day in a bid to reverse tumbling prices and protect its revenues.
"We all want to see the global economy back on its feet as quickly as possible," OPEC secretary general Abdalla Salem El-Badri had said last week.
But "oil prices need to be at levels to help sustain economic growth by supporting longer-term energy industry investments across the board," he added.
Prices are down from record highs above 147 dollars hit in July 2008. A sharp world economic slowdown, sparked by the global financial crisis, has since ravaged demand.
Sucden Financial analyst Nimit Khamar said Monday that ongoing concerns about the crisis -- and its impact of energy demand -- continued to plague the oil market ahead of the OPEC gathering.
"Crude oil prices may be dictated by noise of further production cuts from OPEC nations this week, ahead of the meeting at the weekend, which might push oil prices toward 50 dollars per barrel," he noted.
At the same time, "anxiety over the financial sector and concerns over the global economy ... (are) weighing on oil prices amid concerns over weakening demand," Khamar said.
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