Oil hovers above $73 in Asia ahead of OPEC meet Tuesday, no output change expected

By Alex Kennedy, AP
Sunday, December 20, 2009

Oil hovers above $73 ahead of OPEC meeting

SINGAPORE — Oil prices hovered above $73 a barrel Monday in Asia ahead of an OPEC meeting where investors expect the cartel to keep production levels unchanged.

Benchmark crude for January delivery was down 19 cents to $73.17 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The January contract, which expires later on Monday, rose 71 cents to settle at $73.36 on Friday.

Traders have begun to also watch the February contract, which rose 11 cents to $74.53 on Monday.

Leaders of the Organization of Petroleum Exporting Countries have signaled in recent weeks the group doesn’t plan to change output levels at its meeting Tuesday in Luanda, Angola.

“The market would be surprised if there was any change to output,” said Clarence Chu, a trader with Hudson Capital Energy in Singapore. “At near $75, the price is high enough to fund governments and investment, but not so high it damages the global economic recovery.”

Iraq took back a remote oil well from Iranian forces over the weekend, a confrontation that briefly sent oil prices higher Friday on investor concerns about a wider conflict.

In other Nymex trading in January contracts, heating oil rose 0.98 cent to $1.97 while gasoline rose was steady at $1.90. Natural gas rose 9.5 cents to $5.88 per 1,000 cubic feet.

In London, Brent crude for February delivery rose 22 cents to $73.97 on the ICE Futures exchange.

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