Thread: Oil prices rise after steep fall as OPEC president says US$150 a barrel possible

NEW YORK - Oil futures shot up to nearly US$139 a barrel Thursday after OPEC's president said oil prices could rise well above $150 a barrel this year and Libya said it may cut oil production.


Light, sweet crude for August delivery rose as high as $138.95 a barrel shortly after the New York Mercantile Exchange opened before retreating some to trade up $4 at 138.55.


Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said he believes oil prices could rise to between $150 and $170 a barrel this summer before declining later in the year. Khelil said he doesn't think prices will reach $200 a barrel.


The head of Libya's national oil company said the country may cut crude production because the oil market is well supplied, according to news reports.


"Shokri Ghanem, the nation's top oil official, declined to say when a decision would be made on whether to lower production, or give any indication of the size of the cut under consideration," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn., in a research note.


Oil futures were also rising as investors reassessed comments the Federal Reserve made Wednesday when it held a key interest rate unchanged. Many investors who had expected the Fed to raise interest rates in August now think a rate hike is unlikely until after the November election or next year, said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.


Interest rates affect the dollar; many analysts believe the Fed's rate cutting campaign, which began last September, had much to do with weakening the dollar against the euro and sending oil prices skyrocketing. Investors buy commodities such as oil when the greenback is falling. Also, a weaker dollar makes oil less expensive to investors dealing in other currencies.


The dollar slid against the euro after the Fed's comments Wednesday, and was down again on Thursday.


"Breaking through $140 now ... seems hard to avoid," Cordier said.


Retail gas prices, meanwhile, were unchanged overnight at a national average of $4.067, according to a survey of stations by AAA, the Oil Price Information Service and Wright Express. Gas prices have retreated slightly from a record of $4.08 set June 16, but are likely to fall much more as long as crude oil remains in its recent range between roughly $131 and $140.


"If we go through $140, we're at $4.25 on gas within a week," Cordier said.


In other Nymex trading Thursday, July gasoline futures rose 10.69 cents to $3.501 a gallon and July heating oil futures rose 12.87 cents to $3.8779 a gallon. July natural gas futures fell 17 cents to $12.583 per 1,000 cubic feet.

Source:Oil prices rise after steep fall as OPEC president says US$150 a barrel possible - Yahoo! Canada News

TEHRAN: A senior Iranian oil official said he expected crude prices to rise to $150 a barrel in the near future with the onset of higher demand in summer, the semi- official Mehr news agency reported on Saturday.

Oil hit another record near $143 a barrel on Friday as a drop in global equities markets sent investors into commodities.

"It seems the prices' upward trend will continue and it is anticipated that the price of each barrel of oil will reach $150 in the near future," Hojjatollah Ghanimifard, a senior oil official, told the news agency.

"As we get near the final days of the current month and the arrival of the high-consumption summer season the possibility of a hike in the price of oil increases," Ghanimifard added.

Ghanimifard repeated Iran's previous stance that the crude price rise was not due to shortage of supply in the market.

OPEC member Iran has often said it sees no need for the Organisation of the Petroleum Exporting Countries (OPEC) to boost output, as the United States and other big oil consumers want.

Iran, the world's fourth-largest oil exporter, has repeatedly said the market is well-supplied and blames rising prices on speculation, a weak dollar and geopolitical tension.

Source:REUTERS