Oil Prices Consolidate Gains As Ministers Back Cuts Continuation

Oil prices last Tuesday (Oct. 26) consolidated recent gains, moving sideways after a bounce last week. International benchmark Brent crude traded seven cents higher $22.90 a barrel after leaping 80 cents on Oct. 22. The gains came after fresh signals from oil producers including the Organization of the Petroleum Exporting Countries (OPEC) that they would consider extending the duration of limits on exports. On Tuesday Omani Oil Minister Mohammad bin Hamad Seif al-Ramhi said he backed a continuation of the cuts beyond their expiry in March. Oman is one of a handful of non-OPEC producers that took part in global output cuts that rescued oil prices from less than $10 earlier this year. OPEC President Abullah al-Attiyah of Qatar said he did not expect OPEC to raise output when it next meets in March because excess stockpiles were not shrinking fast enough. But many analysts are expecting a swift elimination in excess stockpiles before the end of the year. Attiyah's comments echoed those made last week by the oil ministers of OPEC bigwigs Saudi Arabia, Iran, Venezuela and Kuwait. Non-OPEC Mexico also has said it does not want to risk a slide in prices when the output agreement expires in March. Dealers on Tuesday were waiting for latest weekly inventory data from the United States. Traders said if the data from the American Petroleum Institute showed a drawdown in crude inventories the market could see a fresh bout of buying. The United States consumes a quarter of the world's oil supply and its data on inventories is a key indicator for traders on the impact of production cuts. - (Reuters)