Oil prices rose Monday after Iran's oil minister said OPEC has no plans to release more oil into the market ahead of its next policy meeting in September and Saudi Arabia said it would keep its shipment volumes steady.
Iranian Minister of Petroleum Kazem Vaziri Hamaneh told reporters on the sidelines of a regional oil and gas conference in Kuala Lumpur that there is adequate crude oil in the market and commercial oil inventories are at a high level.
“There is sufficient crude oil in the market, there is no shortage of crude oil,” he said when asked if the Organization of Petroleum Exporting Countries should raise supplies to the market to ease high oil prices.
Light, sweet crude for July delivery gained 35 cents to $65.11 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. The contract plunged by more than $2 a barrel Friday.
Brent crude for July delivery rose 31 cents to $68.91 a barrel on the ICE Futures exchange in London.
In other Nymex trading, heating oil futures rose nearly a cent to $1.9072 a gallon (3.8 liters) while natural gas fell over 6 cents to $7.601 per 1,000 cubic feet.
Also supporting prices were reports that Saudi Arabia had notified Asian and European customers that July shipments would be kept at June levels, some 10 percent below contracted supplies.
“This comes despite persistently high oil prices, indicating that Saudi Arabia is still limiting supplies in line with OPEC cuts,” said Vienna's PVM Oil Associates.
One factor that drove prices last week was removed, however, when Cyclone Gonu in the Persian Gulf spared major oil installations, alleviating supply worries.
“Prices are holding steady after the slump last week because traders see this as an opportunity to pick up bargains after last week's slump,” said Victor Shum, an analyst with Purvin & Gertz in Singapore.
After pummeling normally hot and dry Oman and Iran's southeastern coast, Cyclone Gonu weakened into a rainstorm late Thursday. It spared the region's oil installations, sending oil prices down Friday. At least 35 people were dead, most of them in Oman, and 30 were missing.
Resumption of exports from Oman had weighed on crude prices last week but analysts said while the cyclone delayed shipments for three days, it did not reduce oil production from the ground.
But concerns about U.S. gasoline supplies continue to weigh on traders' minds. They will be watching weekly U.S. inventory reports for indications whether U.S. refineries will further increase supply amid the peak summer driving season, Shum said.
The U.S. Energy Information Administration reported last week that gasoline inventories jumped by 3.5 million barrels in the week ended June 1, beating estimates. Analysts polled by Dow Jones Newswires had expected a 1.5 million barrel increase.
