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NEW YORK -- Crude oil prices may decline this week after OPEC said it will lift production quotas by 2 percent to increase supply, a Bloomberg survey of traders and analysts showed.
Fourteen of 38 survey respondents, or 37 percent, predicted oil futures in New York will drop. Twelve said the price may be little changed and 12 expect it to rise. In the last survey, 49 percent of respondents forecast a decline in prices this week. Since last Friday's close, crude has risen 2 percent.
OPEC, producer of one-third of the world's oil, plans to raise quotas on August 1 for a second time this year. Excluding Iraq, OPEC is pumping at almost 95 percent of estimated capacity after rising demand and supply disruptions in Iraq and Norway raised prices to a record high.
"There is not much spare capacity but if they do add more than half a million barrels as of August 1, it should have a negative impact on prices," said Dariusz Kowalczyk, senior investment strategist at CFC Securities Ltd in Hong Kong. The United States will likely convince Kuwait, UAE and Saudi Arabia to pump even more before the November elections, he said.
OPEC said on Thursday it would go ahead with an August 1 increase and said there was no need for a meeting set for July 21 in Vienna to discuss higher quotas. "The market has absorbed a lot of bullish information and the lack of an OPEC meeting should stunt the recent uptrend," said Rob Laughlin, a trader with GNI Ltd in London.
OPEC's output is already higher than the new quotas. Ministers from member states, including Saudi Arabia, have said they are pumping more oil to keep high prices from curbing economic growth and diminishing demand. In June, the 10 OPEC members with quotas, all except Iraq, pumped 27.5 million barrels per day, 730,000 more than in May, according to Bloomberg data.