CORRECTED: Oil prices rise as OPEC mulls output boost

7th June 2011, Comments 0 comments

Oil prices climbed slightly on Tuesday, the day before an OPEC output meeting which may decide to increase crude supplies despite faltering energy demand, according to analysts.

Brent North Sea crude for delivery in July rose 27 cents to $114.75 a barrel in early London trade.

New York's main contract, light sweet crude for July, gained 14 cents to $99.15 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC), whose dozen member countries together pump 40 percent of the world's oil, meets on Wednesday in Vienna.

Delegations were arriving in the Austrian capital on Tuesday amid growing fears that high crude prices could further dent world economic growth and energy demand.

OPEC "countries including Saudi Arabia want to hike production and keep prices lower," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore.

"Only Iran and Venezuela may not want to hike production and want to keep prices higher," he added.

However most analysts expect the cartel to leave production quotas unchanged despite a recent surge in crude oil prices spurred by unrest in the Arab world, particularly in Libya.

Iran, OPEC's second-biggest crude producer, favours high oil prices and traditionally opposes an increase in production.

Tehran's OPEC representative said on Monday that the Islamic republic was against any increase in OPEC output.

"There is no need to increase production of OPEC countries at the 159th meeting of the organisation," Mohammad Ali Khatibi was quoted as saying on the state television website.

"The market is balanced... the downward trend in oil prices means that producers must be very cautious before any increase in output," he said.

The country currently holds the rotating OPEC presidency for the first time since the 1979 Islamic revolution.


© 2011 AFP

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