Oil prices edged higher in early afternoon trade today as the market awaited a decision from OPEC on its future oil output. OPEC ministers are meeting in Vienna to discuss oil output ahead of the resumption of crude exports from Iraq. But the upside has been capped on comments from Saudi oil minister Ali al-Nuaimi, who indicated that the cartel will cut down on overproduction but maintain existing quotas. At 1215, crude oil in London was up 19c to USD24.45 per barrel, while on the NYMEX, oil was up 20c to USD26.85.
In a bid to control prices before the US-led invasion of the Gulf State, the cartel began pumping around 1.5 million barrels per day over its official quota of 24.5 million barrels. But oil prices have fallen sharply this month and OPEC ministers want to protect their USD25 price target. Prices are also facing downside pressure as the summer season begins and demand for necessities such as heating oil declines. //www.fxcentre.com