OIL JUMPS ON WEATHER AND OPEC
London Brent crude rose 95 cents to $30.27 a barrel, while New York light crude jumped 52 cents to $33.04 a barrel.
Forecasts of a cold snap later this week in the US northeast, the world’s largest consumer of heating oil, fed the price strength.
Private forecaster Meteorlogix expected temperatures in the region to be 8-15F below normal between Wednesday and Friday.
US prices are more than $2 above the 2003 average of $31, which was a 19 per cent increase over 2002’s mean price and the highest since 1982.
The OPEC cartel announced on Monday that prices had stayed above its target $22-$28 range for a basket of crudes for the 20th, 21st and 22nd consecutive working days.
Under OPEC rules, the group can consider increasing production if the price stays above the band for 20 working days, but a cartel official said no change is expected in output quotas.
OPEC ministers decided in December to leave output unchanged, saying high dollar-denominated oil prices were justified by the weakness of the dollar against other major currencies, which reduces oil producers’ purchasing power.
The dollar hit a fresh record low against the euro, after falling 17 per cent in 2003.
OPEC meets on February 10 when it is expected to consider cutting production to prepare for lower seasonal demand during the second quarter.
"US prices will stay above $30 for some months to come based on OPEC wanting more for its crude now that the dollar has weakened. Longer term, supplies should pick up as demand slips, which will put US prices back towards $27 by late 2004 or early 2005," said David Thurtell, commodities strategist at Commonwealth Bank of Australia in Sydney.
Data last week from the US government’s Energy Information Administration showed crude inventories in the world’s biggest oil consumer fell 3.8 million barrels in the week to December 26 as refiners ran down stocks before the end of the year to avoid tax penalties.
The data left US national crude tanks 8.9 million barrels below levels in the same 2002 period and showed year-on-year deficits in all stocks of oil products.
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