Oil prices rise before OPEC meet

Oil prices edged higher on Wednesday, as investors awaited the outcome of an OPEC production meeting and as Shell was forced to halt production from a field in Nigeria.

New York’s main contract, light sweet crude for October delivery climbed 47 cents to $71.57 a barrel. Brent North Sea crude for October delivery gained 78 cents to $70.20 a barrel in afternoon London trade.

An OPEC production-monitoring committee said it would formally recommend the cartel to make no change to output at Wednesday’s meeting in Vienna. The committee urged moves to boost compliance with agreed cuts instead, Kuwait’s Oil Minister Sheikh Ahmad Abdullah al-Sabah told reporters.

Saudi Oil Minister Ali al-Naimi, whose country is the biggest oil producer in the Organisation of the Petroleum Exporting Countries, said in the Austrian capital, “The market is in very good shape, very well supplied.”

“Given the improvement in oil prices since late-2008/early-2009, there is little pressure to adjust production in order to press oil prices higher,” analysts from the Commonwealth Bank of Australia said in a report.

“Indeed, further large increases in oil prices may be detrimental to international economic recovery.” OPEC members, that together pump 40 per cent of the world’s oil, agreed in late 2008 to remove a massive 4.2 million barrels of daily output from the market as it sought to prop up crumbling prices.

Oil prices, which peaked above $147 in July last year before tumbling to $32 in December, have doubled since the start of 2009 and recently touched the $75 mark.