Oil prices hit high

Press, 13 April 1988, Page 36

Oil prices hit high

NZPA-AR New York Oil prices leaped to the highest, .level this year early yesterday N.Z. time, partly reflecting speculation that I the Organisation of Petroleum Exporting Countries would recruit help from outside producers to constrict world supplies, i Some I traders and analysts said the gain was unsustainable, but others said it signalled a more fundamental t change Jin market sentiment that indicated the end of a lojwprice era in the petroleum business; “This jis not a flash |in the pan, ! this is the beginning of a bull move,” said Peter. Beutel, assistant director, of Elders Futures Incorporated, a New York energy J futures trading concern. “The I real story is the oil market cycle has turned r— it’s ready to go higher.”

On the New York Mercantile Exchange, a key barometer of price trends, the May-delivery contract for West Texas Intermediate crude oil jumped SUSI.OI per 42-gallon barrel to 5U517.89, the highest level since early January. Among refined products traded on the exchange, wholesale heating oil rose U52.42C a gallon to 47.88 c, and wholesale unleaded petrol ; rose 2.18 c a gallon to 50.95 c. J I One United States gallon equals 3.8 litres.

The increase followed a week-end meeting of O.P.E.C. (the Organisation of; Petroleum Exporting Countries) price monitoring committee, which said it would meet with nonO.P.E.C. exporters to consider I shared production restraints. Ci. The move was considered significant becausethe idea was initiated by

eight non-O.P.E.C. exporters f — Mexico, China, Oman, Angola, Colombia, Egypt, Brunei and Malaysia-, ' - i

“There’s momentum to have detente between O.P.E.C. and non-O.P.E.C. producers,” said Daniel Yergen, president of Cambridge Energy Research Associates, a' petroleum market consulting con- - cerh in j Cambridge, Massachusetts. “This would be a major shift in that direction'. It’s bullish for higher prices.”;

O.P.E.C.’s 13 members produce . about - 17.5 million barrels a day. Production from the nonO.P.E;C. exporters interested in I co-operating with the cartel- totals about 8 million barrels a day. An agreement between them 'would affect production that accounts for more than half the consumption, in the noncommunist world.