Oil price set to fall again?

Press, 15 August 1984, Page 38

Oil price set to fall again?

NZPA-Reuter

Rotterdam

The world oil glut which sent spot oil prices tumbling last month has largely evaporated, but the recovery now under way could be shortlived, according to oil traders and analysts.

Spot market prices for the most actively traded crude — North Sea Brent — bounced back in the last week from a low of SUS 27 for September loadings to $28.50 $1.50 below the British National Oil Corporation official selling price. The recovery has halted around this level, but analysts expect further firmness throughout this month. A trader with one of the major oil companies predicted “prices ratchetting

up in a saw-toothed movement.”

The upturn hangs on shrinking supplies of August oil, as excess stocks built up when Gulf war tension was at its height are absorbed and producers respond to disastrously low spot prices by restraining output But much of the oil being held off the market now could reappear next month, threatening a renewed glut unless demand improves enough to take up the slack, the sources said.

Spot market buyers are now paying $27.75 a barrel for September loadings of Saudi light crude, which is the OPEC benchmark oil and which 10 days ago traded at $27, $2 below its official price.