Oil Prices Drop on OPEC Output Indications
The Associated Press
Wednesday, March 8, 2006; 6:32 AM
LONDON -- Oil prices fell Wednesday as OPEC oil ministers appeared ready to keep output levels intact and data from the United States was expected to show crude inventories growing.
Light, sweet crude for April delivery lost 31 cents to $61.27 a barrel in electronic trading on the New York Mercantile Exchange, while April Brent crude futures on London's ICE Futures exchange fell 50 cents to $60.67 a barrel.
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Gasoline dropped more than a cent to $1.6200 a gallon, while heating oil lost a cent and a half to $1.7061 a gallon. Natural gas rose 2 cents to $6.700 per 1,000 cubic feet.
As OPEC's meeting got under way Wednesday, the cartel all but abandoned the idea of cutting production and Kuwait's oil minister Sheik Ahmed Fahd Al Ahmed Al Sabah predicted prices would fall below the $60-per-barrel threshold in the second quarter.
Al Sabah _ who believes geopolitical tensions are adding $5 to $8 to each barrel _ said he thinks prices will drop below $60 by the end of June, but are likely to rebound to the $60 range in the fourth quarter.
Oil ministers from the Organization of Petroleum Exporting Countries cautioned against lowering output at a time when extremists are attacking energy installations in Nigeria and the Middle East.
Still, U.S. domestic oil supply is ample, and at the high end of the average for this time of year. The U.S. Department of Energy's weekly petroleum inventory report was expected to show a build in U.S. crude stocks and decreases in gasoline and distillates, which include heating oil and diesel.
But markets were keeping an eye on the International Atomic Energy Agency's board meeting on Iran's nuclear ambitions, as well as the situation in Nigeria, where recent attacks have reduced the country's production by 455,000 barrels a day.
AI
