Iran General NewsCrude oil rises after Iran minister says OPEC should...

Crude oil rises after Iran minister says OPEC should cut output

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Bloomberg: Crude oil rose after Iran’s deputy oil minister said the Organization of Petroleum Exporting Countries should cut output next month to “keep prices stable.” Dec. 28 (Bloomberg) — Crude oil rose after Iran’s deputy oil minister said the Organization of Petroleum Exporting Countries should cut output next month to “keep prices stable.”

OPEC will decide at a Jan. 31 meeting in Vienna whether to keep oil production close to a 25-year high. The 11-member group decided to keep its output quotas unchanged at 28 million barrels a day at a meeting this month. OPEC produces about 40 percent of the world’s oil.

If OPEC reduces production, “it will balance the market and provide a bit of a lift in prices,” said Tom Bentz, an oil broker with BNP Paribas Commodity Futures Inc. in New York.

Crude oil for February delivery rose 74 cents, or 1.3 percent, to $58.90 a barrel at 10:38 a.m. on the New York Mercantile Exchange. Crude oil in New York reached a record $70.85 a barrel on Aug. 30, the day after Hurricane Katrina struck Louisiana and Mississippi. Prices are 41 percent higher than a year ago.

Hadi Nejad-Hosseinian, Iran’s deputy oil minister, said today that after winter demand for oil eases, OPEC should reduce output “to ensure stability in prices.” Iran is currently producing as much as 4.2 million barrels of oil a day, he said. Iran expects prices to stay between $50 and $60 a barrel next year, he said.

Oil May Rise

New York oil futures will average $60 a barrel in the first quarter of 2006, about $2 more than today, according to the median forecast of 25 analysts surveyed by Bloomberg. Prices will average $58 in all of 2006, the survey shows.

Oil futures have more than tripled since November 2001 as fuel demand rose, especially in China, the second-largest energy consumer. Hurricanes Katrina and Rita, the Iraq War, and civil unrest in Venezuela and Nigeria have contributed to high prices.

Credit Suisse First Boston analysts say Exxon Mobil Corp., BP Plc, Royal Dutch Shell Plc, Chevron Corp. and Total SA this year will probably earn $108 billion, the size of Venezuela’s economy.

U.S. supplies of crude oil, heating oil and natural gas are above their yearly average, damping concern that supplies may run short if colder temperatures returns in January. Natural-gas prices in the U.S. fell 10 percent yesterday, after warmer-than- normal weather forecasts cut demand for the heating fuel.

Consumer Confidence

U.S. consumer confidence rose in December to the highest in four months, helped by falling gasoline prices and an improving labor market. Confidence measures are returning to levels seen before hurricanes Katrina and Rita struck, disrupting oil refineries, raising energy prices and throwing Gulf Coast residents out of work.

“The fear factor of not having enough gasoline is going away, so it’s a bit of a sigh of relief” to consumers, said David Pursell, an analyst at Pickering Energy Partners in Houston.

Gasoline for January delivery rose 3.66 cents, or 2.4 percent, to $1.55 a gallon in New York. Futures surged to a record $2.92 a gallon on Aug. 31. Prices are up 48 percent from a year ago.

Drivers in the U.S. paid an average $2.18 a gallon for regular gasoline yesterday, down 0.1 cent from the day before, the AAA said today on its Web site. Prices have fallen 29 percent from the Sept. 2 record of $3.057 a gallon, according to the AAA, the nation’s largest motorist organization. Pump prices are 22 percent higher than a year ago.

U.S. distillate fuel supplies, which include heating oil and diesel, are expected to fall 1.5 million barrels in the U.S. from 127.7 million barrels, according to a median of estimates by nine analysts surveyed by Bloomberg. Distillate inventories are 7 percent higher than last year at this time. The inventory report is expected at 10:30 a.m. tomorrow in Washington.

Heating oil for January delivery rose 2.5 cents, or 1.5 percent, to $1.662 a gallon in New York. Heating oil reached a record $2.21 on Sept. 1. Futures have gained 36 percent in the past year.

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