Oil: Market hovers near one-month lows, Opec holds fire

LONDON - US oil prices hovered near one-month lows on Tuesday, under pressure from signs Opec would not cut production until its March meeting and on forecasts of rising US crude stockpiles.

News of a shock fall in Chinese crude imports added to the downward momentum.

US crude oil futures eased 13 cents to US$45.15 a barrel, just off a session low of US$44.78, the lowest level since Jan. 7. In London, Brent fell 12 cents to US$42.92.

US prices fell around US$1.20 on Monday, extending two-week losses to more than nine per cent as winter supply fears faded and Opec looked set to defer any output cuts.

The Organisation of the Petroleum Exporting Countries at its meeting on Jan. 30 left output unchanged, but warned it could hold a teleconference to cut production ahead of its March 16 gathering in Iran.

Ministers from Algeria and Kuwait said at the weekend they saw no need for any interim discussion.

And on Tuesday, top exporter Saudi Arabia vowed to keep pumping at nine million barrels per day (bpd) until further notice to ensure sufficient supply to global oil markets.

"Let me confirm that Saudi Arabia's production of crude oil today is nine million and will continue at nine million until other decisions are made ... either to increase or decrease production," said Saudi Oil Minister Ali al-Naimi.

Deborah White, senior economist at SG Commodities, said prices could rally if Opec changed its stance or if this week's inventory data to be published on Wednesday in the United States sprang a surprise.

US crude oil stockpiles were expected to have risen by 1.1 million barrels last week, a preliminary Reuters poll found, helping to maintain the previous week's nine per cent surplus compared to year-ago figures.

Prices also came under pressure from Chinese data showing crude oil imports fell by 24.1 per cent in January from the same month last year, the first month since June 2002 to show a year-on-year decline.

China's oil imports leapt 35 per cent last year, driven by an industrial boom and nationwide power crunch, but analysts have said more use of coal and gas would slow import growth this year.

Though stunned by the scale of the fall in January, analysts cautioned monthly crude import figures were often very volatile.

"The numbers seem highly unlikely but not impossible," said White of SG Commodities. "It is only possible if we see a substantial rebound in February buying, which they can easily do based on current price direction. "

In a statement published with BP's fourth-quarter profits on Tuesday, BP Chief Executive John Browne predicted more moderate global demand in 2005 compared with last year and that prices would find support around US$30 a barrel.

"We've concluded that on the basis of the supply-demand balance and Opec's five-year track record of maintaining production discipline, oil prices are likely to have a support level of around US$30 a barrel for at least the medium term, " Browne said.

Milder than normal winter weather in the northern hemisphere has helped to ease supply concerns and led traders to shift focus from heating fuel to US petrol supplies, which some analysts say look high enough to avert a price spike in spring.

In the middle of last month, US petrol inventories hit their highest level since May 2002. Data to be released on Wednesday was expected to show stocks dipped by 700,000 barrels in the week to Jan. 28, the Reuters poll showed.

- REUTERS