Oil prices steady as market turns attention to OPEC

NEW YORK, Feb 4 (AFP) - Crude oil prices closed marginally higher Friday as markets paused after three days of falling prices and turned their focus to a possible production cut by the OPEC cartel in the coming months.
New York's main contract, light sweet crude for delivery in March rose just three cents to close at 46.48 dollars a barrel.
In London, the price of Brent North Sea crude oil for delivery in March edged up four cents to 43.89 dollars a barrel at the close.
Oil prices had tumbled earlier in the week to as low as 46.05 dollars in New York on Monday after the passing of relatively peaceful elections in Iraq and the decision by the Organization of Petroleum Exporting Countries to maintain output levels at 27 million barrels per day.
Traders were reluctant to push New York prices below 45 dollars.
"As soon as we go towards 45 dollars we get cover buying, but the fundamentals don't look particularly tight," said Seth Kleinman, analyst at PFC Energy.
The rise in oil prices "is more a technical correction ahead of the weekend, in case G7 does say something", Investec analyst Bruce Evers said, adding: "They might say something about the current price of oil, even though I think it is unlikely."
Finance ministers and central bank chiefs from the Group of Seven of industrialized nations gathered in London Friday for a two-day meeting.
Traders were focusing their attention also on OPEC, set to hold a teleconference in five weeks' time, at which its members were expected to cut production to prevent prices plummeting in the coming months as temperatures warm in the northern hemisphere and demand drops off, analysts said.
The teleconference is an unusual step for the 11-member cartel and is in addition to the group's next ministerial meeting on March 16 in Isfahan, Iran.
"People are very wary of setting the oil price too low just in case it triggers action from OPEC," Evers said.
"The trend is probably still very gently upward, because I think OPEC will definitely cut before the next meeting," he said.
Elsewhere, fears of heating oil shortages appeared remote as the northern winter drew to a close, focusing traders attention instead on gasoline supplies in the United States which have been rising ahead of the so-called 'driving season' -- when Americans take to their cars for summer holidays.
Oil prices had fallen Thursday "for a third session as traders' fears of tight winter heating fuel supplies eased", analysts at the Sucden brokerage firm said.

02/04/2005 22:01 GMT - AFP