Oil prices steady in Asia

February 9, 2009
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, SINGAPORE, February 9 – World oil traded steady in Asia on Monday after OPEC member Iraq predicted the cartel will announce further production cuts in a market struggling with weak demand.

New York\’s main oil futures contract, light sweet crude for delivery in March, rose seven cents to 40.24 dollars a barrel in afternoon trade. Brent North Sea crude for March rose two cents to 46.23 dollars a barrel.

Iraq\’s oil minister at the weekend predicted that the Organisation of the Petroleum Exporting Countries (OPEC) plans more output reductions.

"In March, OPEC will convene and there will be an intention for more production cuts to shore up prices and encourage production from non-OPEC members," Hussein al-Shahristani said, according to his close adviser Falah al-Amiri.

OPEC recently signalled it would consider more output cuts in a bid to bolster prices.

Since last July, when oil prices hit records above 147 dollars a barrel, prices have tumbled because of weaker demand in a slowing global economy, analysts say.

OPEC announced production cuts totalling 4.2 million barrels per day late last year but David Johnson, an oil analyst with Macquarie Securities, said 2.75 million barrels have so far been cut in practice. He said he does not see daily cuts exceeding four million barrels.

"I don\’t think they can do much more than that," Johnson said.

Oil prices are stuck in the 40 to 45 dollar range, balanced between expectations of OPEC\’s next moves and poor demand reflected in economic data such as Friday\’s US unemployment figures, he said.

The United States Labor Department reported that the country\’s unemployment rate surged in January to 7.6 percent, its highest since 1992.

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