Oil prices climb

As today's OPEC meeting moves into sharp focus Brent crude rebounded from the low $74/bbl region to around $75.50 (€54 to €56).

Sentiment hinges upon whether the cartel will deliver a production boost ahead of the traditionally haevy winter demand.

Many of the delegate nations have come out and rebuffed the necessity for any production hike whilst Saudi Arabia, the largest producer, has remained tight-lipped on the calls for increased output. US Energy Secretary Bodman and the IEA have both pressed OPEC to increase the number of barrels coming to the market but it remains to be seen whether these calls will be heeded.

If any cuts are to be announced it is likely that they will be small and/or staggered to take effect much later in the year (in a similar fashion to the moves seen at the end of last year).

Whilst oil prices are approaching the region of all-time highs it must be remembered that the speculative element to the bullish tone may yet be muted by the continuing bank credit issues that emerged from the US sub-prime crisis. Fears that the global economic growth enjoyed over recent years will falter in the wake of the credit squeeze will remain as a brake on the upward moves in the oil market.

Our range today will encompass $74-76.40 (€54 to €56), dependent upon the pronouncements emanating from the OPEC summit.