Crude Oil Rises ($59) for a Third Day as OPEC Discusses Output Cut
By Hector Forster
Oct. 16 (Bloomberg) -- Crude oil rose for a third day in New York on concern OPEC members will reduce production further to stem a decline in prices in the past two months.
The Organization of Petroleum Exporting Countries, producer of 40 percent of the world's oil, will meet in Qatar on Oct. 19 to discuss falling oil prices and a proposed output cut, the group's acting secretary general Mohammed Barkindo said yesterday.
Crude oil for November delivery rose as much as 38 cents, or 0.7 percent, to $58.95 a barrel in after-hours trading on the New York Mercantile Exchange. It was at $58.85 a barrel at 6:17 a.m. Singapore time. The contract gained 71 cents, or 1.2 percent, to close at $58.57 a barrel on the New York Mercantile Exchange on Oct. 13.
OPEC still hasn't decided whether to make a proposed 1 million-barrel-a-day cut in output from the group's actual production or its quota. The group's 10 members with quotas pumped 27.6 million barrels a day last month, according to Bloomberg data. OPEC's official production ceiling, which excludes Iraq's output, is 28 million barrels a day.
OPEC members will meet in Doha, Qatar, to discuss one item on their agenda, which is a proposal to cut 1 million barrels a day from the group's actual production, Qatar Oil Minister Abdulla bin Hamad al-Attiyah said in a statement to state-run Qatar News Agency yesterday.
Crude oil also rose on Oct. 13 after Norway shut two offshore platforms for safety precautions. Statoil ASA and Royal Dutch Shell Plc today began closing the rigs, which represent almost 10 percent of output of the nation, the world's third- largest crude exporter.
Statoil and Shell are halting output of about 280,000 barrels daily at the Snorre A platform in the North Sea and Draugen in the Norwegian Sea. Norway's Petroleum Safety Authority ordered the closures because tests found that one type of lifeboat is not strong enough to be dropped from the platforms to the sea, affecting the ability to evacuate in emergencies.
Norway denied Statoil's and Shell's applications for exemptions from the regulations yesterday, though both companies continued to produce oil and natural gas.
To contact the reporter on this story: Hector Forster in Tokyo at hforster@bloomberg.net .
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