Crude oil futures eased on Wednesday on comments from ministers of the organisation of the Petroleum Exporting Countries that they would not allow prices to rise too high.
Sheikh Ahmad al-Fahd al-Sabah, the Kuwaiti oil minister and Opec president, said the cartel would act to cool oil prices if they kept rising.
“If the prices rise further there will be a reaction from Opec to help lower these prices,” said Sheikh Sabah. Opec next meets on March 16 in Isfahan, Iran.
Despite Opec’s reassurances the market remains sceptical on how effective Opec can be if demand continues to rise strongly. Although the oil cartel is credited with helping to bring oil prices down from the record nominal highs last October when the US benchmark crude futures moved above $55 a barrel.
However, the Opec Secretariat has forecast that the oil cartel would be producing close to capacity in the fourth quarter this year, on current global demand growth estimates and a recent scaling back on non-Opec supplies.
IPE Brent for April delivery slipped 11 cents to $48.51 a barrel in London, after rising more than 4 per cent or $1.92 in the previous session.
April Nymex WTI dropped 25 cents to $51.17 a barrel in New York, following Tuesday’s $2.41 advance. The futures market is pricing in higher prices for spring, a time of year that traditionally sees a dip in demand and prices.
Gold remained steady at $434.80/$435.55 a troy ounce following a near $7 increase on Tuesday. Base metal prices also kept most of the strong gains from the previous session. The three-month copper contract was quoted at $3,238.50 a tonne on the London Metal Exchange, compared with its intra-day peak of $3,260 on Tuesday, which was the highest price since January 1989. Zinc jumped through the $1,400 a tonne in LME trade for the first time since October 1997.
Coffee prices set new highs with the New York benchmark coffee futures up more than 4 per cent to a five-year peak on speculative fund buying amid fears of a supply deficit this year.
The New York Board of Trade’s most-active May arabica contract reached a high of $124.25 a pound, the highest since January 2000, and up more than 5 per cent on the day, and more than double the level seen at the start of last year. London coffee futures were also higher with the May robusta coffee contract up $28 or 3.35 per cent to $865 a tonne on the Euronext.liffe futures exchange. London coffee futures have risen more than $100 so far this year.
