ONN: Oil Strengthens as OPEC Keeps Crude Quota Unchanged
07:57 AM Eastern Daylight Time, 03/17/2010 (MidnightTrader) — Oil is on the rise in early morning trade Wednesday as OPEC ministers in Vienna decided to keep crude output steady, while Federal Reserve board members voted to keep monetary policy unchanged the previous day.
At their first meeting in 2010, the 12 oil ministers from the Organization of Petroleum Exporting Countries decided to keep production quotas unchanged from the levels set in December 2008. Some analysts, however, expect member nations to increase the quota when they next meet in September. OPEC nations produce about 40% of the world’s total oil.
At 0750 ET, Brent crude is up 1.0% at $81.35 a barrel, while light sweet crude is up 0.8% at $82.39, while natural gas is down 0.6% at $4.32 a million British thermal units.
Traders will also be looking to the latest weekly U.S. stockpile data to be released by the Department of Energy at 1030 ET. Analysts surveyed by Bloomberg News expect stockpiles to have increased by 1.1 million barrels in the week ended March 12.
Meanwhile, Iraq’s oil minister Hussain al-Shahristani said that the country will be increasing its estimate of crude reserves. Iraq is the sole OPEC member country that does not have a crude quota. The country is estimated to have reserves of 115 billion barrels at the end of 2008.
Turning to India, the CEO of state-run Oil & Natural Gas Corp., R.S. Sharma said that the company may create a sovereign wealth fund to help state companies for overseas energy assets with China. According to Sharma, India’s oil mininstry has already asked the finance mininstry to set up a fund using part of the country’s $254 billion foreign exchange reserve.
