Fin24

Oil higher after Opec output decision

2011-12-15 08:56

Singapore - Oil prices bounced in Asia on Thursday after see-sawing in early trade following an overnight slump caused by Opec's decision to raise output without setting new quota rules, analysts said.

New York's main contract, light sweet crude for January delivery was 70 cents higher at $95.65 a barrel and Brent North Sea crude for January delivery advanced $1.23 to $106.25.

The black gold slumped about 5% in New York on Wednesday, and Thursday's rebound "could be due to some bargain-hunting," commodity analyst for Phillip Futures in Singapore Ker Chung Yang said.

Prices were rocked after the Organisation of the Petroleum Exporting Countries (Opec) on Wednesday said output will be maintained at 30 million barrels per day (bpd), acknowledging it had been consistently breaking its own quotas.

Excluding the production of Iraq - which is not held to quotas - Opec output in November was about 11%, or more than three million barrels, above the official group total limit of 24.8 million bpd.

Opec, whose 12 members produce about one third of the world's oil supply and include Saudi Arabia, meets periodically to set production levels.

"The Opec agreed a target of 30 million barrels daily, ratifying current production near three-year highs," analysts from Phillip Futures said in a report.

"Besides, worries that the Opec lacked a mechanism to quickly trim production of individual member quotas, after agreeing on a high output ceiling, added to selling pressure."