Nymex Crude Falls on OPEC Output Concern

NEW YORK Nov 26, 2007 (Dow Jones Newswires)

Benchmark crude oil futures wrapped up Monday slightly off where they started as traders balanced the possibility of OPEC output hike next week against forecasts of cold weather.

Light, sweet crude for January delivery settled at $97.70 on the New York Mercantile Exchange, down 48 cents or 0.5%. Brent crude on the ICE futures exchange closed 51 cents lower at $95.25 after hitting a record intraday high of $96.65 a barrel.

The prospect of more oil flowing from member states of the Organization of Petroleum Exporting Countries stalled buying that drove the Nymex contract to an intraday high of $99.11 - 89 cents off the as-yet unattained $100-a-barrel mark - in overnight trading. Traders focused on the chance that OPEC ministers meeting in Abu Dhabi, United Arab Emirates Dec. 5 will respond to high prices by shipping more crude to customers.

Business news channel CNBC reported that Saudi Arabia is boosting its crude-oil output to more than 9 million barrels a day ahead of the meeting. The kingdom's production target for Nov. 1 was 8.94 million barrels a day, according to the International Energy Agency.

"There's a lot of OPEC chatter in the market," said Tom Bentz, senior energy analyst at BNP Paribas Commodity Futures in New York. "The question is, will it make a big difference? I'm not sure it's going to be enough to make that much of a difference."

Over the weekend, other OPEC members sent less definitive signals. On Saturday, Iran's oil minister said OPEC would supply more oil if data warranted such a move. Ecuador's oil and mining minister on Sunday told Spanish news agency Agencia EFE that an OPEC output change is unlikely to come out of Abu Dhabi.

Forecasts of colder-than-expected weather in the U.S. Northeast helped boost December heating oil futures to a record high front-month settlement price of $2.7066 a gallon, up 24 points or 0.1%, in spite of the crude slide. The heating oil rally has helped maintain support for oil futures. "To the extent we continue to see heating oil prices go higher, we look for crude to get dragged along," said John Kilduff, senior vice president at MF Global in New York.

Answering some oil supply questions will be the Wednesday release of the U.S. Energy Information Administration's weekly petroleum status report. Depending on their content, the data could provide the kick needed to push the market past $100 or drive it down for the year, analysts said.

"All factors considered, this market still does not feel like one in which a top has been placed," said Jim Ritterbusch, president of oil trading advisory firm Ritterbusch and Associates, in a note. "Nonetheless, we still look for a longer-term top to be established prior to year's end and with this in mind, we will be viewing the upcoming EIA weekly reports combined with daily swings in the value of the US dollar as critical."

Analysts surveyed by Dow Jones expect U.S. crude inventories to have dropped by 400,000 barrels in the week ended Nov. 23. Gasoline stockpiles are seen growing by 900,000 barrels and stocks of distillates are expected to fall by 1 million barrels. U.S. crude stocks are off 8.1% from a year ago, and have fallen four of the last five weeks, as oil imports have declined to match lower refinery utilization during the peak time for maintenance.

Front-month December reformulated gasoline blendstock, or RBOB, fell 2.56 cents, or 1.0%, to $2.4414 a gallon.

Copyright (c) 2007 Dow Jones & Company, Inc.