NEW YORK, Sep 10 Oil rose to within $ 1.50 of the all-time record on Monday ahead of a me

Published: Tuesday, September 11, 2007, 3:02 [IST]
 

NEW YORK, Sep 10 (Reuters) Oil rose to within $1.50 of the all-time record on Monday ahead of a meeting of the Organization of the Petroleum Exporting Countries to decide on output policy.

Major energy consuming nations have called on the group to boost oil supplies due to continued strong world demand growth, but several members have said they see no need to agree to raise output at Tuesday's meeting in Vienna.

A source said core OPEC Gulf states favored a token rise in output in a gesture to consumer nations worried by the impact high prices, but the producer group's powerhouse Saudi Arabia has not voiced a view.

U.S. light crude settle up 79 cents at $77.49 a barrel, near the record $78.77 a barrel struck on Aug. 1, after trading as low as $75.52 earlier in the day. London Brent crude gained 41 cents to settle at $75.48 a barrel.

''They favor a small increase,'' said an OPEC source, speaking after informal talks between oil ministers of Saudi Arabia, Kuwait, Qatar and the United Arab Emirates ahead of OPEC's meeting.

Saudi Arabia, the world's top exporter and OPEC's most influential member, has yet to express its opinion publicly.

Iran, Nigeria and Venezuela have reiterated their stance against raising output. ID:nL09596212 ''There is a little bit of talk that the Saudis may be influenced to push for a 0.5 million barrel per day increase,'' said Rob Laughlin, senior broker at MF Global.

''If there was any doubt about the market's willingness to absorb an increase, today's price action should seal the deal,'' said Tim Evans, energy analyst at Citigroup Futures Research.

Further price support came from worries a tropical wave in the Atlantic could become a serious storm and potentially hit oil facilities, traders said. ID:nN10222479 CUT REVERSAL Any output increase would reverse some of the cuts of 1.7 million bpd -- roughly 6 percent of supplies -- OPEC agreed last year. Some experts are concerned fundamentals could tighten sharply later this year unless OPEC opens the taps.

''We think that the current market is very tight,'' said Nobua Tanaka, executive director of the International Energy Agency, which advises industrialized countries on energy.

Saudi Oil Minister Ali al-Naimi so far has declined to comment, and did not respond to a report by consultancy PFC Energy saying Saudi Arabian sources signaled OPEC may need to boost output by up to 1 million bpd. ID:nL08218677 Saudi Arabia has told its customers in Asia and Europe it would keep its crude oil supplies steady for October from September levels. ID:nT364775 Analysts also are concerned turmoil in the world financial markets, triggered by problems in the U.S. mortgage sector, could tip the United States into recession and hit oil demand.

Payrolls in the United States shrank unexpectedly for the first time in four years last month, data showed on Friday, prompting concerns that credit market turmoil may become a drag on economic growth.

REUTERS TB RN0205


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