Oil extends rise on eve of OPEC meeting
LONDON: World oil prices rebounded slightly on Tuesday, after recent heavy losses, with traders on tenterhooks on the eve of a key production meeting of the OPEC oil cartel in Vienna.
New York's main contract, light sweet crude for April delivery rose 42 cents to 80.22 dollars a barrel.
London's Brent North Sea crude for April delivery was up 48 cents to 78.37 dollars. The contract expires at the close.
The market bounced back slightly after diving the previous day on the back of the strong dollar, and concerns about US energy demand and possible Chinese moves to cool its booming economy.
"Fundamentals (of supply and demand) will be back in focus again also as OPEC meets tomorrow in Vienna where we expect the exporting group to leave output policy as is," said VTB Capital analyst Andrey Kryuchenkov.
He added that such a move would help "reduce swollen stockpiles and support prices in the second quarter of 2010".
Key OPEC members on Monday said there was no need for the cartel to change its official oil output target owing to the current supply, demand and price situation amid a world economic recovery.
The Organization of Petroleum Exporting Countries has no need to "disturb" a balanced oil market, Saudi Oil Minister Ali al-Nuaimi had told reporters ahead of the cartel's latest meeting to set production levels.
Asked if OPEC should change its official output quota at a meeting in Vienna on Wednesday, Nuaimi, whose country is the cartel's biggest oil producer, said:
"Why should we change? The market is in balance, the price is great, inventories are coming down, so why do we need to do anything?"
He added: "Based on what we see, everybody's happy with the market. We are extremely happy with the market. The economy is doing well, (and it) will do better down the road. I don't see any reason to disturb this happy situation."
The cartel's second largest producer Iran meanwhile said that OPEC should not raise its official output ceiling as there was still no sign of any increase in world demand.