SINGAPORE: Oil in Asia Creeps Above $30 Again

By just-auto.com editorial team | 7 July 2000

Oil prices in Asia crept back up above $30 a barrel in quiet trade on Friday, even as Saudi Arabia poised to pump more oil with the aid of a few other producers.

By 0715 GMT, the marker August New York Mercantile Exchange (NYMEX) crude market was trading up by 25 cents at $30.24 a barrel.

This was a minor rebound, considering the market's 68-cent fall on Thursday to settle at $29.99 a barrel, the first time in nearly four weeks it had fallen below $30.

Brokers said the rise in Asia on Friday was marginal, and did not really signal any recovery.

"For the last two days, it's been showing a gain on (after-hours) ACCESS but come off again during day trading," said one New York-based broker.

"Somebody's trying to push the market back up."

Brokers said volumes were low at around 800 lots compared to the more usual average of 1,200 lots normally seen for the front month crude on the ACCESS market.

Technical analysts said crude prices had more room downside, and selling could extend to the next support levels at $29.05, after breaking through the last at $30.25 on Thursday trade.


The NYMEX crude market has suffered a thrashing this week as the world's leading oil producer, Saudi Arabia, surprised the market on Monday, with a vow to release more oil to cool overheated prices.

On Wednesday, the NYMEX crude market was hammered down by $1.83 a barrel in one of its largest single-day losses in months.

Saudi Arabia, together with the Organization of Petroleum Exporting Countries (OPEC), has raised output twice in the last three months to satisfy the thirst of the largest consumer, the U.S market.

OPEC decided on June 21 its members would boost production by 708,000 barrels per day (bpd) from July, but the markets shrugged this off, believing more supplies were needed.

It was still unclear if the latest Saudi initiative has the backing of other OPEC members, as Riyadh's announcement initially appears to have stunned many producers.

Middle East Gulf-based sources however told Reuters on Thursday the kingdom and a few other producers were on track to release 500,000 barrels of oil daily in the next few days.

The United Arab Emirates, Kuwait and Algeria were among OPEC members believed to be standing ready to hike oil output.

Saudi Arabia, boasting reserve capacity of more than two million bpd that can be pushed out almost immediately, is by far the biggest producer in OPEC.