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  • bluecheese4u bluecheese4u Nov 16, 2007 10:31 AM Flag

    ``This month, there is lower demand in China, lower demand in the U.S,''

    ``This month, there is lower demand in China, lower demand in the U.S,''

    Oil Rises as OPEC Ministers Say They've Lost Control of Prices

    By Mark Shenk

    Nov. 16 (Bloomberg) -- Crude oil rose more than $1 a barrel as ministers from the Organization of Petroleum Exporting Countries said the group has lost control of prices.

    ``OPEC can't do anything about the price,'' Venezuela's oil minister Rafael Ramirez said today in Riyadh, Saudi Arabia, where OPEC is holding a heads-of-state summit this weekend. Oil prices could reach $100 a barrel ``soon,'' he said. The December futures contract in New York expires today.

    ``The OPEC meeting is interesting only because of the expressions of exasperation we hear'' about prices, said John Kilduff, vice president of risk management at MF Global Ltd. in New York. ``The expiration of the December contract is adding a lot of volatility to the market. Open interest is plunging so there's a lack of liquidity.''

    Crude oil for December delivery rose $1.63, or 1.7 percent, to $95.06 a barrel at 9:53 a.m. on the New York Mercantile Exchange. The more-active January contract rose $1.56, or 1.7 percent, to $93.63 a barrel. Futures climbed to $98.62 on Nov. 7, the highest intraday price since trading began in 1983. Prices are up 69 percent from a year ago.

    Brent crude oil for January settlement rose $1.32, or 1.5 percent, to $91.55 a barrel on the London-based ICE Futures Europe exchange. Brent reached $95.19 a barrel on Nov. 7, the highest since trading began in 1988.

    ``This is a leadership meeting and there's no expectation that production policy will change,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons in St. Louis. ``This might have a bigger impact on the foreign exchange markets than on the oil market. There are a number of concerns about U.S. policy concerning the dollar.''

    Falling Dollar

    The U.S. dollar declined against the euro, enhancing the appeal of commodities as an investment. Commodities often move in the opposite direction of the U.S. currency. A lower dollar makes oil relatively cheaper in the countries using other currencies.

    ``I don't think the market needs more oil,'' Algerian Oil Minister Chakib Khelil told reporters in Riyadh. He voiced concern that the global economy is weakening because of the subprime mortgage crisis in the U.S., and this may be reducing demand for fuel. ``This month, there is lower demand in China, lower demand in the U.S,'' Khelil said.

    OPEC's next meeting on production policy will be held on Dec. 5 in Abu Dhabi. The group was founded in 1960, holds three quarters of the world's oil reserves and accounts for more than 40 percent of current production.

    ``I am in regular touch with ministers of all suppliers, both OPEC and non-OPEC,'' U.S. Energy Secretary Samuel Bodman told reporters in Istanbul today, where he was meeting his Turkish counterpart. ``I have requested they increase supplies.''

    Prices fell yesterday after the Energy Department reported that U.S. crude-oil stockpiles climbed 2.81 million barrels last week, the first gain in four weeks. Analysts surveyed by Bloomberg expected the report to show a decline.

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