World oil prices ease from 21-year highs

WORLD oil prices eased from 21-year highs yesterday as OPEC ministers conceded they had very little power to calm the market.

US light crude slipped 22 cents to $40.56 a barrel, little more than a dollar shy of a 21-year peak struck last Friday. London Brent crude futures lost 16 cents to $37.10.

“An unequivocal signal from OPEC could help calm the markets a bit, but there are all sorts of other issues influencing the price this time,” said John Waterlow, analyst at WoodMacKenzie in Edinburgh.

The Organisation of the Petroleum Exporting Countries meets informally today to consider a Saudi proposal to raise output quotas by at least 6%. But it says its ability to cool overheated markets is limited because the price spike is not caused by a shortage of crude supply.

“I don’t think that control is in OPEC’s hands,” UAE Oil Minister Obaid al-Nasseri said in Amsterdam ahead of an informal weekend OPEC meeting to discuss a possible crude production increase. “There are many factors behind these prices.”

Waterlow said speculative buying, fear of supply disruptions in the Middle East and shortages of gasoline were driving prices.

“We also have to bear in mind that the peak season for gasoline demand in the United States is yet to come and there is no sign of any immediate relief to that problem,” he said.