U.S. oil prices plunge

Press, 14 September 1988, Page 41

U.S. oil prices plunge

NZPA-Reuter New York American crude oil prices fell below SUSI 4 a barrel on Monday (early yesterday, N.Z. Time) amid pessimism about the ability of the Organisation of Petroleum Exporting Countries to curb production that has glutted the world oil market, oil traders and analysts said. October crude contracts on the New York Mercantile Exchange for West Texas intermediate, the American benchmark crude, fell to $U513.85, down US35c from Friday’s close. It was the lowest trading level since September 17, 1986, when American oil futures traded at SUSI3.BO. The decline follows Friday’s US3Oc-a-barrel decline. Friday’s decline occurred after reports that Saudi Arabia opposed any meeting of the OPEC price committee before the group’s Ministerial conference in November. Also, on Friday, the Venuzuelan Energy Minister, Mr Julio Cesar Gil, said he did not foresee any OPEC price committee meeting soon. The inability of OPEC to pump less oil is aggravating a world already glutted with surplus oil, American analysts said. “There is no sign that OPEC could get its act together,” said Mr Richard Kane, a broker with Merrill Lynch Futures. “The market is fundamentally and technically weak.” OPEC produced an average of 20M barrels per day in August, against an official quota of 15.06 M barrels that exludes Iraq, according to a Reuters survey of oil industry experts. European oil stocks rose 30M barrels in August, and most of the surplus was concentrated on crude oil stocks,