Crude futures near record-high levels
(Agencies)
Updated: 2005-04-04 13:36

Crude prices pushed near record-high levels on Monday even though the president of the Organization of Petroleum Exporting Countries said the group would initiate a second output rise to calm an overheated crude market.

Light, sweet crude for the May contract had risen 29 cents to US$57.56 a barrel on the New York Mercantile Exchange as of midday in Asia. The benchmark commodity reached a record high of US$57.70 a barrel on Friday.

Heating oil prices rose marginally to US$1.6695 a gallon (3.8 liters).

OPEC president Sheikh Ahmad Fahd al-Sabah. [AFP]

The president of OPEC said Saturday the group will increase its overall production ceiling by 500,000 barrels a day starting in May to meet expected world demand.

"For sure, there will be an increase in the third quarter and fourth quarter, and the increase will start from May," Sheikh Ahmad Fahad al-Ahmad Al-Sabah said.

Al-Sabah was referring to an increase previously authorized by OPEC during its meeting in Isfahan, Iran, last month. At that time, OPEC increased its production ceiling by 500,000 barrels to 27.5 million barrels a day, and said it might provide for another 500,000 barrels a day if crude prices did not stabilize.

Al-Sabah attributed the recent change in prices to psychological fears of supply shortages and added that OPEC should reassure the market in order to cap the price surge.

OPEC already is exceeding the production ceiling, at around 28 million barrels a day, according to Al-Sabah.

Lorraine Tan, director of research at Standard & Poor's investment services in Singapore, said the timing of OPEC's actions is crucial in affecting crude prices.

"If OPEC acts quicker, prices would come off," she said.

Prices rose Friday after a power failure at Venezuela's giant Amuay oil refinery forced the plant to shut down its processing units on Thursday.

Petroleos de Venezuela S.A., or PDVSA, said the refinery would be running at full capacity within a week. The Paraguana refining complex, which includes the Amuay and Cardon refineries, normally produces around 700,000 barrels per day.

Venezuela is the world's fifth largest oil exporter and a major fuel supplier to the United States.

Prices have gained more than US$3 since Thursday, when Goldman Sachs, a major trader in the energy markets, released a report saying oil markets might have entered a "super-spike" period which could eventually push prices toward US$105.

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