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SINGAPORE: Oil edged close to $105 a barrel in Asian
trade on Thursday, touching another new record high after an
unexpected drop in US stockpiles and OPEC’s rejection of calls to
increase output.
Dealers said the continued
weakness of the dollar was also helping drive crude prices, which
have hit a string of records and led US President George W. Bush to
urge the OPEC cartel to boost production.
New York’s main contract, light
sweet crude for April delivery, traded briefly at a new high of
$104.95 before easing to $104.30 in the afternoon trading. It closed
Wednesday at $104.52.
London’s Brent North Sea crude
for April delivery eased 22 cents to $101.42 a barrel from its
record close of $101.64 on Wednesday.
In announcing it would maintain
daily production at the current level of 29.67 million barrels, OPEC
said Wednesday that the market was “well-supplied”—a sentiment
not fully shared by traders.
“The truth of the matter is
there is not a lot of supply in the supply chain,” said Justin
Wilks, director of trading and operations at Global Commodities fund
group in Australia.
With prices over $100, Wilks
said, “I would suggest that we would have to get used to it.”
Prices shot higher in US trading
hours Wednesday (Thursday in Manila) after the US Department of
Energy said crude inventories tumbled by 3.1 million barrels last
week.
That confounded market
expectations of a rise of 2.4 million barrels and was the first
weekly drop for a month and a half.
The Organization of the Petroleum
Exporting Countries (OPEC) blamed the high cost of crude on
speculative buying as investors sought a haven amid a weak dollar
and high inflation.
“The market is well-supplied,
with current commercial oil stocks standing above their five-year
average,” it said after meeting in Vienna to discuss output
policy.
It said the current price of
crude “does not reflect market fundamentals [of real supply and
demand].”
--AFP
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