Oil prices rebound as Saudi toughens stance

The kingdom could even call for a cut in production 'if prices go down very low' according to Saudi official.

April 11, 2000, 03:23 PM

LONDON (AFP) - Oil rebounded slightly in London trading Tuesday after the world`s leading producer Saudi Arabia toughened its stance against a further supply increase at the next OPEC meeting in June.

The price of Brent North Sea quality oil for May delivery rose 60 cents to 21.90 dollars a barrel. In New York on Monday, the price of benchmark light, sweet crude oil for delivery in May fell by 1.19 dollars to 23.85 dollars.

Leo Drollas, chief economist at the Centre for Global Energy Studies, said he thought prices would strengthen.

The reason for the falls of recent sessions, he said, was "a combination of factors." "We know more about what was going on in the first quarter," he said.

However, analysts said the market is still digesting the impact of last month`s Organisation of Petroleum Exporting Countries (OPEC) decision to raise output and is still eliminating "the speculative froth" of the weeks before the meeting.

That meeting agreed to restore output to levels of a year ago, before a round of cuts designed to revive flagging prices but which ultimately led to nine-year highs of more than 30 dollars a barrel.

The OPREC ministers also agreed to meet again in June to reassess the situation.

As prices faltered on Monday, a Saudi oil official said Saudi Arabia opposes any increase in OPEC production in June.

"The situation on the oil market does not allow for any increase in supply, an increase is not even under consideration," said the official who asked not to be named.

The kingdom could even call for a cut in production at the OPEC meeting in Vienna on June 21 "if prices go down very low," he warned.

http://www.akhbar.com/article/0,1690,Business-17964,00.html

-- Martin Thompson (mthom1927@aol.com), April 12, 2000